Does your employer have a pay for performance philosophy? If so, how is this philosophy executed? If yourorganization does not have a pay for performance philosophy, what are changes to pay based on?My company uses the merit pay form of pay for performance. Home office management annually determines how much money is in the pool for each region. Each employee sets outobjectives at the beginning of the year. My immediate manager determines what the financial goals are and we, will his approval, determine how we are going to get there. We have a mid year review to see how each employee is progressing. This gives my manager a chance to discuss any issues and offer praise where needed. We are also able to give our input on our progress and if something needs to be changed or addressed.Home office will also determine if there is money in the budget for bonuses. I believe that the merit pay program is used to retain good employees and to reward them for their year long hard work. The company recognizes that since 2008, results have been lower than expected. They also realize that despite the economy, we are performing well. It's been my experience, that if one doesn't hit their projected numbers, but performs that tasks assigned to them, they will be rewarded. There had been a year that I didn't receive a merit pay increase, but Ireceived a bonus.Response 2My organization has a merit increase program. Our managers are supposed to rate our employees by giving them a performance review. Our salary employees also get what is called a VC bonus. This bonus is based on how the company does as well as how many goals the employee achieves from the last performance review. The VC bonus is anywhere from $5,400 to $10,800. The problem with this system that I have is that the hourly employee who are actually building and working on the product to get it out the door do not receive this bonus. They do not receive any bonus. I do not find that this is fair. I am not even sure if these guys are aware of this bonus