Balancing Merit Pay and Fair Salaries: How Would You Handle Compensation Challenges?

Suppose you manage a small business with 30 employees. You discover that some employees are motivated by money, while others are motivated by security. For those who want more money, you provide merit pay increases in which their income is determined by their productivity. The other employees have a fair salary. What problems might arise? How can we handle the compensation issue to drive productivity in the organization?

Octavius has raised a valid question and has expressed his thoughts excellently. Please consider his points without letting emotions cloud your judgment. To assist you in independent thinking, I will provide some guidance. The most effective way to seek assistance is to outline your ideas and then inquire whether you are on the right track, preferably through a private message.

Contemplating Different Types of Small Organizations

When contemplating different types of small organizations, tailor your response based on the nature of the organization. For instance, consider a call center where all employees perform similar tasks versus a small nursing home with diverse roles and grades of staff. Put yourself in their shoes and contemplate the most suitable remuneration package for each grade, as well as how you would react in those scenarios.

Wishing you a lovely day.

Regards,
Simhan
Learning and Teaching Fellow (Retired)
The University of Bolton, UK