This paper reviews the historical perspectives and contemporary perceptions of merit plans as tools to promote excellence and productivity. A review of literature involving merit plans, their success, and conditions linked with successful and unsuccessful plans is combined with a survey of deans of public and private business schools to determine perceived residual benefits of merit pay plans. Implementation problems are also addressed. Inasmuch as merit pay systems are currently being externally imposed on a number of public universities, this study -- with its implications and suggestions for future research -- should be of interest to administrators, departmental chairs, and faculty as well as to researchers involved in "merit pay" as a stream of research.
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