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My company is about to institute merit pay.This sounds like a horrible idea to me because I fear it will reward “productivity” (yes, that is in quotes for a reason) not actual quality or contribution.
Anyone work for a company where this has worked for them? How do I make sure I have “merit” without losing my soul to playing the merit game? -Rebecca
Homies who know what’s up: What have been your experiences with merit pay?
I work in a company that uses merit-pay. I really don’t like it. I definitely believe that it rewards “productivity” over quality and overall team contributions. It would be better if we got raises or regular bonuses for being high contributing team members (outside of productivity), but we don’t. It’s gotten to the point where certain employees who crank out astronomical amounts of work (but who are otherwise just cogs in the wheel) get paid MUCH more than other employees who are reliable, enthusiastic, and honest. I have a coworker who is a trainer and shares many responsibilities with my manager to help take things off her plate. She made $20 less than I did last pay cycle.
There’s a lot of talk about “out-earning” our base salary. This is motivating in the beginning, but when you start to realize that your paycheck looks VERY similar month to month, regardless or how hard you work, it is no longer motivating.
Interesting perspective. This is my fear. I have a very collaborative take on my work, and think that helping my coworkers do a good job is essential to the organization’s performance. But I don’t think that is what merit pay will reward. When I mentioned to my boss that my fear is that it rewards a masculine way of being in the workplace, I got called a feminist.
Like being a feminist is a bad thing, or somehow detrimental to the work environment?
Is there some way to take that up with his boss or HR? That’s decidedly inappropriate language choice on his part (and, in my humble opinion, extremely validating of the concern you expressed).
Interesting that you assume my boss is a man. She isn’t. I agree that it is validating of my concern. Not sure how to take it up with HR.
Merit pay is good in theory, but how it’s practiced really determines whether or not it’s helpful or soul and career–crushing. Has your employer outlined set goals for you to complete to show you warrant merit? Are there amorphous “benchmarks” that people talk about but nobody really knows what they are? I think it’s important to discuss with your manager what is expected and how they would like you to accomplish these expectations. Also, having a positive and productive relationship with your manager is probably the best way to receive a merit increase. There are plenty of people working their tuchases off under the radar, but unless people in charge see what they’re doing, they stand little chance of receiving notice unless they have an active manager advocating their behalf. In my experience, setting a merit-only increase policy for raises is not nearly as effective as simply setting up goals for people to meet and rewarding them for it. Ultimately, whether your company’s merit-only raise policy will be effective for it and you depends on how they implement it and how good their management team is at recognizing the difference actual merit and showing off.
I think they are working on goals. We were supposed to have them in place by the end of July, but I haven’t seen them.
When done correctly, merit pay might align employees with the primary business drivers. However, generally, the metrics are poorly aligned with the desired outcome and end up having a net negative effect.
I would also recommend watching this. It’s really interesting!
RSA Animate – Drive: The surprising truth about what motivates us
We were shown this video in a leadership development course, and it was really enlightening and definitely spoke to me. Thanks for finding it again!
Please tell me someone has read “Punished by Rewards” by Alfie Kohn. It talks all about how giving rewards for things make you less productive and worse quality. It’s a great read if you haven’t heard of it before. The problem is that most companies don’t see it that way. I don’t have the answers of how to fit into that world, except to save up so you can get out.
Alfie Kohn is the love of my teacher-theory life. I haven’t read “Punished by Rewards” but it’s on my list now!
Thanks, I just ordered it from the library.
I love me some good pop-economics. Added it to my Goodreads list.
I second Janice!
There’s also quite a bit about that in Dan Ariely’s books. It just drives me insane that companies (and schools re: rewards and punishment) seems to evolve in a vacuum where research has no impact 🙁
My company gives bonuses based on performance. Productivity plays only a small part, perceived contribution is what really makes you land a much higher reward.
I’m not totally down with that, being painfully shy, contributing is not my strong suit.
I’m a loudmouth, but my contribution is often see in team productivity, not individual. Have you found a way to get a merit raise?
No, not at all. I get a standard minimum percentage raise.
Actually yours would be the ideal type of contribution, but for performance reviews it seems to go either way. I’ve seen guys get rewards after managing a project and not speaking to their team at all. Hell, I’ve seen guys have other people clean up after their mediocre work and get promoted.
I’m wondering if you’re a teacher…
Regardless, I think the important thing in a merit pay situation is to keep track of your own successes and contributions. You have to become an advocate for yourself. Keep detailed records of all the ways you’re meeting or exceeding the established standards, and make sure your pay is aligned with those records every period. Most people I know who track carefully find discrepancies all the time. It’s a lot of extra work for you, I’m afraid, but ultimately worth it. So long as you respectfully but firmly submit your adjustments, you should be paid fairly. Most people don’t make any additional income after switching, though. Just heads-up.
I appreciate your suggestion of keeping track of my own accomplishments. I should probably get better about keeping a running log. I noticed a coworker has an “atta-boy” folder in his email to file things. Perhaps I should do the same!
This is good advice for every employee in every work situation — keep track of your own work & performance, esp. any time you receive praise or compliments in writing. At the least, it’s an ego-boost, but at the most, it’s a way to prove you’re worth a raise, bonus, next level up job, etc. You can’t sell yourself short if you keep your own records.
Totally agreed, not to mention, even well meaning bosses/supervisors/evaluators are human and make mistakes, misplace information, get confused, etc. I’ve found that being my own record keeper and advocate has been incredibly helpful in evaluative situations!
Does anyone have a system of doing this that they find effective?
Since December 2013 we’re in a new system (base salary + a significant bonus once you accrue three positive yearly evaluations or two excellent ones), so this discussion is rather timely for me.
Until September 2013 I had a manager with whom I didn’t get along.
That means I’m in the habit of using that “atta boy” folder in my mail archive as well (originally to keep myself motivated under that manager, now to document my performance perparing for december 2014).
In order to get that client feedback or project manager input, I try to review all the projects I work on every two weeks, and give feedback on our collaboration, even if it’s just “thanks for meeting the delivery deadline, that makes my part of the process smoother”.
I find it helps me document rather more objectively & facilitates the collaboration, which makes the project easier, which leads to… better feedback *grin*
TL DR : give feedback to get feedback, improve my contacts and my products, store relevant mail exchanges till I need them for my evaluation.
Wow, people get thanks in writing? I barely get single syllable acknowledgement.
I think it’s most important to know the benchmarks and learn to be more vocal about what you’ve accomplished.
If possible, ask if you–or fellow employees–can be on the team that determines your company benchmarks. Or ask if you can incorporate an evaluation of pay with every annual review, where you will come prepared with a personal assessment of what you’re bringing to the company. This will mean taking time to document your important contributions, both in terms of your final work product and what you contribute in team meetings, one-on-one with other employees and one-on-one with clients.
A lot of people worry that being vocal about what they contribute will seem “braggy” or in poor spirit, but you absolutely have to be your own advocate. If something was your idea, make sure that you document that it was your idea. If your HR or superior thinks bringing up your contributions is bad–this company has become a bad fit for you. It’s time to move on.
I like the idea of getting on the team that determines benchmarks. That is a great idea!!
We are eligible for merit based raises once a year. I found out (after busting my balls for a year) that merit pay is really a way of making sure we make more than the person hired after us. For example, the person hired after me started at a higher salary. Without a bump, person would overtake my salary in 2 years based on our standard COL adjustments. So I get a “merit raise” to keep me earning more. Everyone seems okay with this arrangement, because it is only withheld if you seriously screw up (as one of my co-workers did and did not get the merit jump).
The organization I am with uses a pay for performance system that has clear benchmarks that contribute to a person’s evaluation. At the end of each quarter the staff member and supervisor meet to discuss how they are doing, any problems they might be facing and how they are moving towards their goals; this is also a good time to discuss “extra contributions” for instance helping to train other employees, continuing education or interesting programs they are spearheading. The final meeting is a yearly review, if they have met or exceeded expectations they get a percentage bonus at the end of the year and that percentage is also added to the next year’s salary.
In this type of system it is extremely important that the supervisor works with each employee so they understand the expectations of the year and that employees contribute as much information to the evaluation process as possible. I supervise a group of 10 individuals and a few weeks prior to our evaluations I request an update on their goals and also any other projects they are doing. This keeps me informed on their productivity but it also gives us a chance to change or modify their goal if it appears they are not going to complete a goal. My goal as a supervisor is to have my staff meet all of their expectations, and preferably exceed them.
Thank you for the management perspective on this. One thing I’m afraid of is that I’ve never had clear goals at this job, so the merit pay seems evasive.
I worked for a non-profit company that did merit raises on a yearly basis. The only reason it worked was because there was a very detailed process for determining what your “merit” was. There were ten categories that covered all the possible job duties. You were ranked 1,2, or 3 in each category, based on if you were below expectations, meeting them, or exceeding them. Then the points were added up and your “number” correlated to a percentage of merit raise given for the year. It wasn’t 100% subjective, as your boss could rank you higher or lower in a category than other bosses might for the same work, but our bosses did compare notes with each other so it kept it pretty “fair” across teams. The breakdown also helped with understanding what you could do to improve; if you were getting an 1 in a certain category, that’s where you talked with your boss to see how you could improve in that area. It also helped to even out strengths and weaknesses; I always got a lower score in one certain area but made up for it by getting really high scores in other areas. I really liked it because for the most part we all felt like we were getting accurate compensation for achievements. However, most of that had to do with the elaborate system of determining merit that was accurate and fair for all parties. Without that, it could have been a very crappy experience.