Merit pay plans are often managed using a standardized scale or matrix, partially to ensure pay equity and to meet compensation objectives associated with where people are in the pay range. Using standardized performance appraisal ratings $($e$.$g$.,$ ranking from $1-5$ where each rating is well defined$)$ helps to ensure that employees are compensated fairly within structured programs. That doesn't mean, though, that employees make the same amount of cash for the same rating.

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But in most cases, it does mean that the same rating will equate to the same amount of cash employees receive as part of the program. If two people in the same pay range earn the same performance rating, earning the same amount of cash for their outcomes is only fair and equitable.

Organizations that use tools such as compa$-$ratios are meant to ensure that high$-$performing and higher$-$compensated employees are more highly rewarded. Someone who makes a higher base salary will earn more cash with the same performance rating.

Most compa$-$ratio programs are built to accelerate earnings to the mid$-$point, and then slow the earnings potential by $30-60\%$ for those above the mid$-$point to ensure they do not cap out at the range max over the course of their employment in that role.

Organizations that use compa$-$ratios may maintain performance payouts according to the individual's position against the mid$-$point. This means that someone who makes less, and has a lower compa$-$ratio, can actually earn more cash for the same performance rating than another person who is higher paid and in the same pay range.