faqs.org » Abstracts Index » Abstracts » Human resources and labor relations

The myth and the reality of pay for performance

Article Abstract:

A popular method of merit pay administration will result in balanced budgets, though at the risk of bankrupting all credibility of performance-based wage programs. Research reveals that neither employees or top management should be blamed for poor performance appraisal methods, though even the most effective merit evaluation process will be left useless or possibly harmful by an inadequate budgeting system. In a real effort to prevent conflict over discrepancies between budgeted plans and the real needs at that very moment, merit-pay processors have tried to make the budget process better agree with reality.

Innovations, Economic aspects, Wages and salaries, Performance standards, Job performance standards

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Increasing minimum wages without maximum cost

Article Abstract:

Amendments to the Fair Labor Standards Act will require a 15 percent increase in the lowest permitted wage rate. A sequence of fixed increases to the minimum wage rate is expected to follow. Employers should resist the temptation of a quick, but costly, fix by adjusting all salaries by 15 percent. Companies with grade range systems would find a distortion of pay practices affected by range position. Selective and increasingly smaller adjustments to supervisor and subordinate salaries may be sufficient in companies with many layers of supervisors with small salary differentials.

Compensation and benefits, Human resource management, Minimum wage

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