How can you convince poor performers that the merit pay system is for real without showing them the raises given to top performers?

2 Answers

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

First off, if your employees do not believe what you are telling them about pay structures, there is something fundamentally wrong with your relationship with those particular employees.  Something will need to be done about that.

That said, there are things that you could do to try to convince the poor performers that the program is real.  Of course, if they already do not trust you, they may not believe it.

First, while you have said that you cannot show them the merit pay given to top performers, you did not say anything about having top performers testify.  In other words, top performers can, if they wish, tell their coworkers that they have gotten merit pay.  They need not say how much, but if they say that the merit pay is real, the poor performers might take them seriously.

Second, you can open the company’s books.  You do not have to show the poor performers exact numbers for who got how much.  However, if you show them line items in the company budgets or audits for the amounts paid out to top performers, they might be more inclined to believe in the system.

Again, if poor performers have this little trust, there may be a serious problem, but these are two potential ways to try to get them to believe in the merit pay system.

thanatassa's profile pic

thanatassa | College Teacher | (Level 1) Distinguished Educator

Posted on

First, one would begin by parsing what is meant by "for real" and "poor performers." 

At the most basic level, your company has implemented a "merit pay" system that gives extra money to some people but not others. The people who do not receive the extra money may be skeptical about three things:

  1. Whether any actual money is being handed out at all
  2. Whether the money is being handed out in a fair and equitable fashion, or just handed to managers and their cronies
  3. If merit pay is replacing annual raises, or whether it exists just as an excuse to pay less in salaries overall

The solution to all of this is transparency. This would include providing a statement of precisely the total sum of money being handed out and clear and objective criteria for merit pay. So, for example, you might have two levels of merit pay for customer service staff, the first being "lowest quartile of complaints in year," and the second being "highest quartile of reported customer satisfaction in surveys." You might also specify the precise amount if fixed (e.g. $1,000 per year) or percentage (2 percent annual raise) for each level of performance. 

Having clear and transparent metrics allow employees to understand precisely how much merit pay is upon offer and tells them in a straightforward manner how to qualify for it or how to understand why they did not qualify. Without such elements of transparency and objectivity, it is perfectly reasonable for employees to suspect that this is either a cost saving exercise, or an exercise in favoritism or cronyism. 

 

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