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Should managers tie salary raises to Performance Appraisals?
Home » Assessment » Performance Appraisals » Should managers tie salary raises to Performance Appraisals?The verdict’s still out on this one. It depends who you ask. Some experts feel strongly that every action has a reaction; namely, a good performance means greater salary. A poor performance means at least, no raise. At most, a firing.
Here’s a sampling of the reasons behind this debate:
· Yes, tie salary raises to performance appraisals:
Tying salary to performance motivates employees to strive for the goals you’ve set in your annual evaluations, some experts say. They say that using performance appraisals to determine pay scales helps because employees know what’s expected of them, they know when and how you’ll analayze their contributions, and they feel rewarded for doing a good job with something very important to them—money.
· No, salary increases have nothing to do with performance appraisals.
Some people in the business world say that automatic annual pay raises and merit increases inflate the salary structure as a whole. Instead, they recommend giving periodic cost-of-living increases that have nothing to do with performance appraisals, and to give one-time bonuses for exceptional work done on a case-by-case basis. These commentators want pay scales to be aligned with the labor market, not driven up automatically through merit increases.
All in all, it’s up to you and your company to determine what will work best. You know your employees, your market, and how to motivate and encourage employees to do their best.
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- Where do I find, or how do I create, performance appraisal forms?
- How can employees prepare for a Performance Appraisal?
- Should managers tie salary raises to Performance Appraisals?