Merit pay plans are effective regardless of the validity of the performance appraisal system.

Question

Quizplus · Accepted Answer

Merit pay plans require a valid and fair performance appraisal system in order to effectively determine and reward employees based on their performance. Without a valid appraisal system, merit pay plans can lead to subjective and unfair evaluations, which can demotivate employees and negatively impact the organization's overall performance.

Merit Pay Plans Are Effective Regardless of the Validity of the Performance