While few empirical evaluations exist of merit pay in any employment
sector, public sector schemes have generally had equivocal results.
Accurate work assessment and other aspects of implementation have proven
difficult to achieve, and promotion continues to be the major monetary
reward and incentive. However, many continue to believe that merit pay can
bring efficiency and an enhanced competitive framework to the public sec
tor. This article aims to set out the main problems involved in implementing
merit pay in public sector organisations. Areas that need to be addressed to
achieve optimum design and implementation are outlined.
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