Merit pay should be more than 1% of the employee's pay in order for it to be seen as significant.

Question

Quizplus · Accepted Answer

Merit pay is meant to reward exceptional performance and motivate employees to work harder. However, if the bonus or increase in pay is only 1%, it may not be seen as significant enough to truly motivate employees to strive for excellence. Research has shown that a merit pay increase of at least 3-5% is necessary for it to be effective in driving improved performance.

Merit Pay Should Be More Than 1% of the Employee's