Merit-Based Pay

Merit-based pay is a compensation system where employees are rewarded based on their performance and achievements rather than seniority or tenure. In this model, individuals who meet or exceed specific goals, demonstrate exceptional skills, or contribute significantly to the organization may receive higher salaries, bonuses, or promotions. The aim is to motivate employees to improve their productivity and performance, fostering a culture of excellence. This approach seeks to align employees' efforts with the organization's objectives, ensuring that the most effective workers are recognized and incentivized financially for their contributions.