The truth about merit pay What exactly are employers hoping to achieve from performance pay, and to what extent are these goals reached? With merit pay - coming under mounting criticism, our survey of 125 organisations from the private and public sectors provides a detailed review of current UK practice, looking at: the rationale for merit pay; the coverage of merit schemes; how merit awards are determined and appraisal systems operate in practice; the main outcomes associated with performance pay; the key changes employers have made, or are planning to make, to their merit schemes; and the differences between merit systems in the public and private sectors.