IMPACT: Investigating Merit Pay Across Countries and Territories

Executive Summary

Past findings on the relationship between merit pay raises and important work-related outcomes such as effort, pay-related attitudes, and turnover have yielded equivocal results. Overall, we know little about whether/how performance-based pay influences key employee outcomes and the level of pay for performance required to yield the desired outcomes.

This study seeks to answer four main questions:

  1. Is there a pay-increase threshold at which people begin to “work harder” and report more positive attitudes?
  2. How do employee prior expectations about their incentives play a role in terms of changing their effort and attitudes after receiving the incentive?
  3. What level of merit increases do employees value?
  4. How do cultural differences influence the effectiveness of merit pay across countries and territories?

Data will be collected before and after merit pay raises and matched with objective merit raise increases. Thereby the IMPACT project will create valuable insights for participating organizations and simultaneously advance existing theory.


Centre for Leadership and Innovation, The Hong Kong Polytechnic University, Hong Kong:
Prof. Jason D. Shaw

Representative for Switzerland: Center for Human Resource Management (CEHRM), University of Lucerne, Switzerland:
Dr. Alexandra Arnold, Dr. Anna Sender


Dr. Alexandra Arnold