If an employee handbook is filled with complex jargon or technical language, employees will not be inspired to read through it or may not fully understand what they need to do to meet relevant requirements. Making sure that employee handbooks and information related to incentives are clear, concise and up to date means that employees will always know what they need to do to achieve their targets and gain merit increases and other rewards. It is always easier to meet a target if you know exactly what that target is. There are, however, a few things that help merit increases to achieve their aims more easily: Clarity of Requirements/Aims When they are implemented properly, they are an effective form of reward, reduce staff turnover and increase employee satisfaction. In principle, merit increases are a fantastic way to motivate staff members and increase productivity. Clients and customers will see that the business has a happy work environment and potential future employees will be more inclined to want to join the company. Gaining satisfaction in their work will help to improve the business as a whole. Increased employee satisfaction – If an employee or a team feels as though their hard work is noticed, then they are happier to work. This then spreads to other areas such as employee rapport and helps to improve the working environment overall. Improvements in staff mood – Feeling recognized and appreciated improves mood and overall feelings of happiness within the workplace. If staff members know that there could be a merit increase at the end of their hard work, then they will automatically want to be more productive. Offering a reward for work that is well done or goes above and beyond expectation is a good way of encouraging people to hit their targets. Motivation – Having something to aim for is well known to motivate people into action. Offering incentives such as merit increases helps individuals to feel that their contributions are being noticed and recognized. Staff retention – When employees feel as though they are appreciated, they are less likely to move on to other positions. There are many reasons why a company may offer merit increases to its staff. Bonuses are one-off payments, whereas a merit increase is an overall increase in salary. It is important to note that a merit increase is not the same as a bonus, although both may be as a result of exceptional performance. They therefore act as a motivational target for employees. These wage increases are not given to all employees and rely on evaluations and feedback from other staff members or clients. The criteria may include fulfilling specific targets or performing well in certain areas, as well as other specifications such as attendance, attitude to work and how well they work as part of a team. To be eligible for it, employees will need to fulfill criteria that are set out by their company. Merit IncreaseĪ merit increase is an incentivised form of wage increase. This type of wage increase is not incentivised and therefore is not a reflection of personal performance or ability. Normally, a wage raise will happen to account for increased cost of living rates, national wage increases, inflation or to fulfill contractual obligations.Įmployees will often automatically gain a wage increase after a set amount of time working for a company – for example, after an introductory or trial period – or at the start of the new tax year when budgets have been reassessed. Generally, a raise is distributed to all employees either at the start of the new tax year or occasionally bi-annualy. What Is the Difference Between a Raise and a Merit Increase?Īlthough they may seem very similar, a merit increase is not the same as a raise. They are often used as part of an incentive package to reward employees who perform well and also act as motivation for other employees who wish to achieve their own merit increase.Ĭompanies who make use of merit increases often notice increases in employee retention, engagement and productivity, as well as overall employee satisfaction. Merit increases are often decided by using a combination of internal criteria, the budget of the company and an understanding of an employee's value within the job market. What Is a Merit Increase?Ī merit increase is essentially a wage rise that is given to employees as a form of recognition for outstanding performance. In this article, we take a look at what a merit increase is and what it could mean for you or your company. This is no different with terms such as ‘merit increase’, ‘raise’, ‘regular raise’ and ‘raise with inflation’. With so many terms around to describe what might, on the surface, seem like the same thing, it can be challenging to understand the differences. The business world is filled with jargon and technical terms that can be difficult to negotiate.
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