Our Non-Profit (NPO) clients regularly ask us about Incentive Pay and Merit Pay programs for their organization. These inquiries are often driven by their Board of Directors and/or their CEO / Executive Director. The concept sounds great on the surface – let’s not be like the government and incentivize our staff to work harder and smarter. Let’s reward the high performers.
However, as the saying goes, ‘the devil is in the details.’ The same organizations often find that implementing Merit Pay puts strong pressure on their Performance Appraisal program since money is now attached to it. It is also much harder to qualitatively and quantitatively measure success in an NPO than it is in the private sector.
This White Paper provides an overview of what NPOs should look at when considering Merit Pay. The following questions need to be answered: