Performance-related pay awards

Sheila Attwood 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, senior content manager, data and HR insights

New and updated

Date:

21 September 2023

Type:

Survey analysis

Review of pay awards 2023: Basic and performance-related pay awards - an extraordinary year

With pay awards reaching the highest levels of the last 30 years, we review the trends in both basic pay awards and those based on a measure of performance.
Date:

15 December 2022

Type:

Survey analysis

Performance-related pay rises: XpertHR survey 2022

Our survey looks at the use of performance-related pay schemes, the factors taken into account when deciding the pay rises and the effectiveness of such schemes.
Date:

22 September 2022

Type:

Survey analysis

Review of pay awards 2022: Basic and performance-related pay awards

After an unprecedented rise in the level of pay awards over the past year, we review the trends in both basic pay awards and those based on a measure of performance.
Date:

23 September 2021

Type:

Survey analysis

Review of pay awards 2021: Basic and performance-related pay awards

We provide an overview of pay settlement levels over the past year, looking at both basic pay awards and those based on a measure of performance.
Date:

26 May 2016

Type:

Survey analysis

Performance-related pay survey 2016

Our survey looks at the practicalities of running a performance-related pay scheme and the effect that this method of reward actually has on employee performance.
Type:

How to

How to design, introduce and run a performance-related pay scheme

Practical guidance on introducing a performance-related pay rise scheme.
Type:

Tasks

Introduce, manage and review a performance-related pay scheme
Date:

16 February 2007

Type:

Employment law cases

Holiday pay: Holiday pay to include attendance and performance bonus

In May Gurney Ltd v Adshead and others EAT/0150/06 the Employment Appeal Tribunal holds that the remuneration of employees entitled to a perfomance bonus "does vary with the amount of work done". Accordingly the amount of a week's pay for the purpose of calculating holiday pay will be determined by taking the employees' average pay over the 12 weeks preceding their holiday.
Date:

1 June 1994

Type:

Employment law cases

PRP scheme lacked transparency

An assessment process for performance-related pay purposes, which led to a woman being paid £780 a year less than men on like work, suffered from confusion, double counting and an absence of transparency, rules a Norwich industrial tribunal (Chair: D R Crome) in Latham v Eastern Counties Newspapers Ltd.

About this topic

HR and legal information and guidance relating to performance-related pay awards.