NOTE, July, 2013: I had this essay posted in two places – as a regular blog entry (where you are now) and also as a page under “21st Century, Essential Practices”. Due to extensive editing of the essay, I’m deleting this post.
Updated version of this now deleted essay is at page “Merit Pay Problem” Please see, to explore serious flaws of merit pay.
See also: “Merit and Bonus Pay Incentives” for well known behavior economics researcher, Dan Ariely’s findings on human behavior, including his findings on why and how merit pay does not work.
My Best! – MaggieAnn