Editor's message: Many organisations link either all or part of the pay awards made to individuals to an assessment of their performance - measurements of performance can include competencies, skills and knowledge as well as results and achievement of objectives. Organisations often find that performance-related pay (also called merit pay) is one of the best ways of both recognising and raising employee performance.
However, a performance-related pay scheme has to be carefully designed to ensure that it fits with the organisational culture and values and has the confidence of employees. You must be confident that you have a robust method of assessing employee performance, to ensure that a fair and consistent approach is applied.
Sheila Attwood, managing editor, pay and HR practice
HR and legal information and guidance relating to performance-related pay awards.