HRM/300

need help replying to this, 50-100 word count

It’s mentioned that employees may feel that a lack of recognition will create loss of motivation.  One of the areas that I find hard, is to administer a Performance and Career Development appraisal.  I find this hard because we evaluate based on performance, but merit raises are hard to give when everyone is “exceeding” or meeting expectations. Most companies offer a pool, such as 3% of total salary and then ask managers to divide this between direct reports.  3% pool does not mean everyone will get a 3% raise.  Assuming all are evaluated similarly, how do you give one employee 6%, when the next only gets 2%?  Is there more than performance?  When you ask employees they feel their performance should be tied to compensation, such as raises.

Think about inflation.  Typically, inflation accounts for 1.5% to 3% each year.  When you get a raise each year do you consider what is going on with inflation?  Is the merit increase an increase based on performance or is it a standard of living increase?  I am curious to the responses. Should there be truly an increase above and beyond standard inflation?