Is Merit Dead?

Sean and Paul get together with Christina Watts, Consultant with Marsh, to debate whether the traditional annual pay increase cycle still earns its place, and what companies can do instead. You will hear the case that the yearly increase process is trying to solve too many problems at once, a counterargument that it serves real human needs no spreadsheet captures, and a practical middle ground that separates market movement, internal equity, and performance into different tools. If you are deciding whether to keep, shrink, or replace your yearly increase cycle, this conversation walks through the budget math, the risks of shifting dollars into bonuses, how to stay competitive for talent, and why adding job levels may solve more than tweaking percentages. Chapters

08:36 – The argument that the yearly increase cycle satisfies no one
09:50 – What an annual increase is actually designed to fix
10:30 – Why raises are the wrong tool for rising benefit costs
11:23 – The human counterargument for manager discretion
12:29 – Cash, growth, and mission as competing motivators
14:18 – Does pay really not matter to some employees
17:00 – Why the budget number is the real breaking point
20:09 – Base salary as the worth of the job, bonuses for results
21:31 – Whether bonus dollars can be trusted to actually show up
23:33 – Building a budget from benchmarking instead of a flat percentage
28:30 – Competing for talent when base pay is capped
32:03 – Step progressions and job levels as an alternative
42:43 – The one thing worth fixing across HR