The operation of a merit pay plan depends on the effectiveness of the performance appraisal system.

Question

Quizplus · Accepted Answer

The success of a merit pay plan is largely dependent on the accuracy and reliability of the performance appraisal system used to evaluate employee performance. If the performance appraisal system is flawed, the merit pay plan will not accurately reflect employee performance and may lead to dissatisfaction and demotivation among employees.

The Operation of a Merit Pay Plan Depends on the Effectiveness