merit rating

merit rating
merit rating or merit pay
HR
a payment system in which the personal qualities of an employee are rated according to organizational requirements, and a pay increase or bonus is made against the results of this rating. Merit rating has been in use since the 1950s. Unlike new performance-related pay systems, which focus rewards on the output of an employee, merit rating examines an employee’s input to the organization—for example, their attendance, adaptability, or aptitude—as well as the quality or quantity of work produced. In merit rating programs, these factors may be weighted to reflect their relative importance and the resultant points score determines whether the employee earns a bonus or pay increase.

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