A merit pay program is a performance-related pay increase that is based on the employee’s achievement of certain criteria that is set by the employer. A performance appraisal determines whether the employee has achieved the outlined objective. Jackson is tasked with implementing a merit pay program at Precision Manufacturing. However, three main factors are likely to pose a challenge in the implementation of the program.
The first challenge is that employees do not have a clear, documented job description. Therefore, it is not possible to measure their performance since their roles in the organization are not well defined. Secondly, there is very minimal communication between employees and their supervisors regarding their performance. Regular communication is important because it creates a rapport between the employees and the management, thus enhancing motivation and cohesiveness within the organization.
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