Given that employees depend on their pay for many things, including taking care of themselves and their loved ones, some would argue that basing pay on team or organizational performance might be questionable on ethical grounds because the performance of other team or organizational members is not under an individual employee’s control. Others might argue that merit pay based on team or organizational performance is a powerful motivational tool to encourage organizational members to work together, cooperate, and perform at a high level.
1. Think about the ethical implications of merit-based pay.
2. Under what conditions is the use of merit-based pay to motivate employees questionable on ethical grounds?