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Session 2547

MERIT PAY - WHAT, WHO, HOW AND WHY?

Warren R. Hill Weber State University

Abstract

The purpose of this paper is to examine the issue of merit pay, particularly as it applies in engineering technology programs, and to attempt to answer the above questions as they relate to merit pay in educational institutions. Some of the pros and cons of merit pay systems, especially in public institutions will be examined, and some possible alternatives to merit pay as a more effective reward mechanism will be evaluated.

What?

Merit pay raises are typically defined as pay for performance above and beyond those rewards that are commonly referred to as across-the-board raises or cost-of-living raises (COLA). Merit raises are also separate from raises given on some campuses for the purposes of reducing inequities such as those due to gender or discipline. Merit pay raises are usually given for meritorious performance as a way to reward people whose performance during the latest review period was exceptional. In some instances, it is believed that such raises may instead be a way to motivate people to improve their performance.

There are actually several different kinds of merit pay plans in existence. One is a pure merit system where any increases in one’s salary are based entirely upon meritorious performance. A second system is one in which increases are a combination of COLA and merit. In systems one and two, the increase becomes part of the faculty member’s base salary. A third system is one which is a combination of a basic COLA raise with a merit bonus. The COLA raise becomes part of the base salary but the merit portion is a one-time award.

Merit pay raises are a contentious issue on many campuses for a variety of reasons. These reasons include the perception that such raises are either inequitably determined or inequitably distributed. Another point of contention is that often there is very little money available for such raises and thus the effort to determine who should receive them far outweighs any available monetary reward. A third point is that if the purpose of merit pay is to improve performance, there is little evidence that such rewards act as much of a motivator. In fact, many feel that merit pay is a detriment to quality performance and employees should be rewarded in other ways.

Lawrence Dennis1 cites several other reasons institutions of higher education should not award

Proceedings of the 2001 American Society for Engineering Education Annual Conference & Exposition Copyright © 2001, American Society for Engineering Education

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Hill, W. (2001, June), Merit Pay What, Who, How, And Why? Paper presented at 2001 Annual Conference, Albuquerque, New Mexico. 10.18260/1-2--9553