A problem often encountered with merit raises is that employees may not believe that their compensation is tied to effort and performance, and they may not be able to differentiate between merit pay and other types of pay increases.

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This is a common challenge with merit raises, as employees may feel that their performance is not accurately reflected in their compensation or may confuse merit pay with cost-of-living adjustments or across-the-board raises.

A Problem Often Encountered with Merit Raises Is That Employees