Abstract

Previous research on merit pay has focused on the context in which merit decisions take place and on characteristics of the employee. In the present study it was hypothesized that not only do employee characteristics influence merit increases, but so do characteristics of the employee's supervisor. The results from 175 employees in a midwestern manufacturing plant showed that 11% and 24% of the variance in employee salary increases were attributable to supervisory and employee characteristics, respectively. These results suggest that supervisory characteristics should be included in future research involving correlates of employee salary increases and by organizations when auditing the administration of merit pay plans.

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