How is performance related to merits in your organization if you aren’t bonused?

If a fixed amount for merits is allocated - how does leadership decide how much each team member gets? What if the base line is 3% but there isn’t much more that can be given on top of that but there are people on the team that are higher performers?

How do you incentivize your team to perform if even top performers don’t get more than a 3% increase?

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We've been giving out title upgrades and promotions in lieu of more pay. Not everybody is incredibly happy with that, understandably, but it's what we can afford to give right now and it still shows career progression even if it doesn't show salary progression.

Interesting take - most organizations know title really doesn’t mean much if the pay doesn’t come with it. I wonder what their reasoning is behind this in thinking title can replace pay.

This is a real challenge. When merit budgets are fixed, it’s hard to clearly link performance to pay in a way that feels fair. I’ve seen it work better when expectations are transparent and performance is recognized in more than just percentages.

We try and look at a certain budget per department and break the categories into exceeds, meets, and below standard. depending on the budget you can fluctuate the percentages of how many employees get the exceeds and the highest increase, and how many, if any fall below and receive no increase. There used to be a 10% standard in most industries for the below standards but that is hard to lean on when you have high performing teams. We also have caps on comp that save on budgets but can be a hard pill to swallow for tenured employees.

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