Title: Management
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Performance pay also called merit pay can be defined as a system that remunerates its employees in relation to an assessment of individual performance and how well one works. Such systems basically are meant to align employees’ individual effort to the goals and objectives of the organization. Hence it is a reward to individual employees whose tasks have been considered to be above the set standards of an organization or above average. In cases and situations where the output produced or sales produced by an employee are hard or difficult to be empirically determined, performance pay is most applicable; for examples in the teaching profession. In cases of performance payment, individual performance is usually reviewed regularly through a process called performance appraisal. Performance appraisal helps in establishing and identifying if the set objectives and standards are in line with the performance results. Generally, performance pay is usually rewarded on basis of performance results rather than on the time worked, (Council, 2011).
Performance pay for teachers has been quite a subject of contention in many places and especially in the USA. Performance pay is meant to compensate teachers based on a set of performance standard and does not consider a teacher’s level of education or the level of experience gained. Hence, the more outstanding results a teacher produces from the students, the more the teacher is to be paid. Merit pay does not necessarily come in form of financial rewards but it can be take other forms such as promotions and public recognition, (Wragg, 2012).
However there are various disputes on the effectiveness of merit pay such as how performance can be empirically measured and arguments such as performance pay may encourage unhealthy competition among teachers eventually leading to the narrowing