Lesson 9 Case Study: “The Proposed Merit Pay Program

Lesson 9 Case Study: “The Proposed Merit Pay Program

Lesson 9 Case Study: “The Proposed Merit Pay Program: Should Winners Take All”


The situation in this case, “The Proposed Merit Pay Program: Should the Winners Take All?”  revolves around the proposed performance appraisals and the basis for salary increases. To some extent, this case study asks you to consider the benefits and problems with the current reward system and a new proposed system.  

Rather than the typical Case Study (summary, issues, recommendations/evaluations), you will only need to submit (1) some sort of table or Excel Sheet working out the different programs, and (2) answers to the questions (typical case study word limitations (1700 words) and graduate writing expectations still apply).

Caution: To give a proper answer, you will have to work out the two systems as a BEGINNING to discuss the issues surrounding the use of performance appraisals and its effect upon salary increase structure. You will need to know (1) how much money you will be distributed, (2) specifically, to whom you will be distributing, and (3) in what amounts under each plan.  The biggest issue will be justifying which professors are eligible to receive pay increases.

The Objectives

1.    To improve your understanding of the relationship between performance appraisal ratings and pay increase programs.

2.     To demonstrate the need for compatibility of performance appraisal ratings with pay increase programs.

3.     To develop skills in the use of performance appraisal data to develop pay increase recommendations

4.     To illustrate the challenges and complexities of administering a merit-based pay increase program.

Answer the following questions after you create your table:

1.     Discuss the methodology you used to create your table including how should Professor Foreman determine the specific amount of merit raises for each faculty member under the existing plan? under the proposed plan? What amount would each faculty member receive?  (Just discuss how you created your table).  As with all discussions regarding a personal methodology, the use of I statements is perfectly acceptable here.

2.     Discuss the possible effects of the existing plan and the proposed plan, (a) which plan do you believe is a better plan, why? (b) what recommendation should Professor Foreman make to the Dean? Why?

3.     From your consideration and study the of the case issues, evaluate the use of merit pay?

Use a Q & A format for the questions after publishing your table.


Miller, T. R. (2009). “The Proposed Merit Pay Program: Should the Winners Take All?” Harvard Business Review.


Reading Highlights

  • Pynes (2013) highlights that the performance evaluation process:

â—¦Can assist agencies in accomplishing their missions

◦Provides feedback to the agency about whether the other human resources management (HRM) functions are working in concert to execute the agency’s mission

â—¦Provides management with essential information for making strategic decisions about employee advancement, retention, or separation 

â—¦Provides information and feedback to employees

â—¦Indispensable for planning and research

  • Pynes (2013) discusses motivation in two theoretical aspects: content theories of motivation, and process theories of motivation. He explains that an employee’s performance is often determined by the level and interaction of ability and motivation. 
  • It also discusses the issues with the efficacy of performance evaluation systems, as well as dissatisfaction from raters and supervisor.
  • The Becker, Antuar, & Everett (2011) article focuses on the adoption and implementation of a performance management system in the nonprofit sector. 
  • The Belle, Cantarelli, & Belardinelli (2017) discusses the biases in performance appraisal focusing on the anchoring and halo effects.
  • The Kim & Holzer (2016) article focuses on the reactions to the performance appraisal process by both supervisors and employees.

*Reading from the book is Chapter 10