Merit vs Anniversary Pay Rates

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Performance reviews are an integral part of business. Employees crave feedback, whether it is positive or negative, as it provides motivation and a better understanding of the job requirements. Anniversary Date and Common Merit Date performance reviews each have advantages and disadvantages. It would behoove the human resource professional to choose the approach that best suits their organization’s needs and goals. Some of the factors that should be taken into consideration are; planning cycles, hiring practices, and organizational culture (Koss, 2009, p. 7)

Anniversary reviews are commonly used when the organization has a lot of hourly, lower level employees (Koss, 2009, p.2). This method provides a fair system. “Every employee receives a performance appraisal and sometimes a compensation adjustment on the one year anniversary of their start in a job, and at one-year intervals thereafter. All employees get reviewed and receive compensation adjustments at the same interval” (p. 2). This method is popular when the organization wishes to evaluate select employee performances against industry established standards, instead of vetting an employee against an alternate employee (p 2). “[The Anniversary Date Method can] lighten the managers’ workloads and increases the likelihood that they’ll spend more time on their employee performance reviews, since they’re not caught trying to do them all at once. In addition, they spread out the appraisal-related workload over the year, avoiding processing peaks” (p. 2).

Sometimes, Anniversary Date reviews are not the ideal choice. “An employee’s future is based solely on his/her manager’s subjective opinion of them” (p. 2). When appraisals are conducted annually, and on the anniversary date, usually about half of the staff is in line with prospective organizational objectives (p. 2). Another con of this method is that the appraisal date generally does not match with any specific performance period (p. 2). This method can...
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