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The Devil is in the Details: A Review of Merit Pay in Higher Education

Track: Human Resources Management

Keywords: Merit pay; higher education

Merit pay--rewarding high performing faculty with greater financial compensation--is intuitively appealing and is consistent with our sense of equity and fair play: those who do more, who accomplish more should earn more. However, empirical work on performance based compensation has shown mixed results. In this review of the higher education literature we discuss the elements that can make up performance based compensation systems, and the benefits and/or problems that may ensue upon implementation. Our goal is to help faculty and institutions avoid unfortunate outcomes by delineating the trade-offs inherent in the merit pay system design process.


Elizabeth McCrea -
Seton Hall University

Marta Deyrup -
Seton Hall University


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