Final answer:
Merit raises may fail to increase employee effort due to insufficient linkage to performance, a culture that rewards effort over quality, and pressures on instructors related to evaluations. Efficiency wage theory suggests higher pay can motivate workers, but ineffective management of raises and fairness issues may undermine this. Substantial and well-communicated merit increases aligned with work value are crucial for their success.
Step-by-step explanation:
A frequently heard complaint about merit raises is that they do little to increase employee effort. There are several reasons why this belief persists. Firstly, merit raises are often seen as insufficiently linked to actual performance, either because they are too small to be meaningful incentives, or because employees do not clearly understand the connection between their efforts and the raises they receive. Furthermore, if the culture within an organization rewards effort regardless of the quality of output, employees may not feel motivated to improve their actual performance beyond a certain point. Additionally, the pressure on instructors to receive positive evaluations, which may tie into compensation and career progression, can sometimes lead to inflation in grading and effort recognition, again diminishing the value of genuine merit. This issue becomes even more complicated when posted online, as transparency can exacerbate the pressure to provide positive outcomes rather than honest assessments.
Efficiency wage theory, on the other hand, posits that employees are more productive when paid above market rates because they recognize the value of their position and fear the salary loss they would suffer if they were to lose their job. This motivates them to work diligently and remain loyal to their current employer. Employers, acknowledging the high costs and time investment required in hiring and training new employees, may therefore offer higher wages preemptively. This strategic move helps mitigate turnover costs and maintains a motivated workforce.
However, it's also important to note that merit raises, when not managed effectively, can lead to perceptions of unfairness or lack of transparency, which can undermine their intended motivational effect. Additionally, when merit increases are not substantial enough to impact an employee's quality of living, they may not serve as an effective motivator. The Davis and Moore theory suggests that rewarding more important work with higher levels of income enhances motivation, but if merit raises do not adequately reflect the value of the work or are perceived as arbitrary, this principle may not hold true.