Benefits of Merit Raises
It is possible to improve employee levels of production along with a happier workplace environment by looking at the value of merit raises. Some ways these types of raises can be an asset include:
Job Hopping – If the employee does an effective job and you want to keep them aboard, a raise in pay along with a pat on the back will indeed sway job hopping, especially since so many of the workforce are looking constantly at new or better job opportunities.
Productivity – People are generally happy when they are rewarded at work and that includes receiving a merit raise. Keeping them happy means keeping them productive—if you never offer a raise of any kind, a merit raise will be invaluable in promoting productivity.
Loyalty – Merit raises help generate employee loyalty. Employees tend to tell co-workers when they receive a raise based on their merits. When other employees realize they may too be able to receive a merit raise, it creates an environment of loyal employees who want to do well and stay with the same organization.
Age Appropriate – No matter what generation the employee is part of, merit raises are welcomed by anyone and everyone. Other employee incentives working well for the young may not be as inviting to an older generation—but not with these types of raises: One size fits all!
In Lieu Of – When cash flow is short and other benefits are cut—even cost of living raises, the value of a merit raise does improve morale and represents a way to keep employees focused until bad financial times turn into gains and the cut benefits begin again.