In a BLR webinar entitled ‘Incentive Pay: Best Practices for Designing and Managing Pay-for-Performance Plans’, Dan Kleinman provides the following information about merit pay, one of the types of incentive pay:
- Merit pay features incentives given on the basis of measurable, observed improvements in an employee’s job performance over a certain period of time or on the achievement of specific performance goals
- These measurements may result from quantifiable, objective steps such as production numbers, sales totals, personnel records, performance tests, or business unit performance results
- Also, merit pay may be determined by subjective judgments such as performance appraisals or management-by-objective (MBO) evaluations
Dan Kleinman is the principal of Dan Kleinman Consulting, a California-based compensation and human resource consulting firm. For the past 18 years, he has served as an independent consultant for a broad spectrum of regional, national, and international companies, providing compensation, performance, organizational planning, and reward-system design services. He can be reached at firstname.lastname@example.org.