The Influence of a Merit Pay Guide Chart on Employee Attitudes toward Pay at a Transit Authority

The influence of the merit pay guide chart on managerial, professional, technical, and clerical attitudes toward pay is examined in a large transit authority. Although findings indicate that both instrumentality and merit pay satisfaction are influenced by a merit pay guide chart (i.e. position in range and performance ratings) and the size merit increases, the relationship are not necessarily in the predicted direction. Regression analysis indicated that the impact of guide chart ratings on merit pay satisfaction is considerably more than on instrumentality belief. Employees who received merit increases larger than suggested by the guide chart are more satisfied with their merit pay increase than those who receive what is specified or less than what is specified. Implications for future research and compensation practices in the public sector are discussed.