Awarding Salary Increases

Awarding Salary Increases

Barbre-Anne Wasdin

Lynn University

Awarding Salary Increases

     In today’s corporate setting, attaching an employee's wage to their job performance is commonly widespread. Supporters of the performance related pay (PRP) programs will attempt to and maintain better personnel. This type of program offers additional incentives to motivate and compensate employees for improved performances.

     Most corporation’s intention of a reward system is to appeal, maintain, and motivate skilled personnel. There are some diverse forms of rewards or incentive methods to compensate workers. “Incentive pay, also known as "pay for performance" is generally given for specific performance results rather than simply for time worked. While incentives are not the answer to all personnel challenges, they can do much to increase worker performance” according to Billikopf (2006).

     According to Ferguson (2016), “Employers give salary increases based on individual performance: where one salaried worker receives a three percent raise, another may receive five percent.” PRP has been a topic of heated arguments over the past few years. Some management disagree with it in opinion, some support it strongly, while the remainder discuss about the problems related with its application. It is imperative to pay careful attention when determining whether an employee is to obtain a wage or a salary increase. Improper reviews of a position can not only create legal problems, but can often develop employee discontent, especially if the employee considers that performance of the tasks and obligations of the position deserve a better reward than is presently presented.

      “Only half say annual incentives, like bonuses for top employees, make any difference in how well people do their jobs. Least effective of all: Merit raises, which managers are supposed to give (or not) to employees based on, well, merit. Just one in five (20%) of the executives surveyed thinks merit pay ‘drives higher levels of individual performance’ in their companies” according to Fisher (2016). The main cause that merit pay so often does not provide a positive result is that individual managers do not stick with the system. They have staff’s personal lives and fellow coworkers dictate the pay performance review.

     Janet Jenkins, a divorced mother of three young children, works very hard at her job. On her performance appraisal, she has received a very high ranking. The fact that she is the sole bread winner in her family should have no impact on her salary increase. As her manager, I would only consider her job performance and not the external factors. Therefore, I would recommend she gets a 5% increase. The details are in the following table:

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