Managerial accounting questions - Merck

Merck & Co., Inc. (A)

1. What are the major problems with Merck's performance appraisal and salary administration program?

2. How are the levels of salaries determines at Merck? What's a campa-ratio?

3. Is pay for performance exists under the current system?

4. Would an employee with superior performance year after year keep receiving higher and higher pay increase?

5. What changes would you recommend?

Merck & Co., Inc. (B)

1. What are the key features of Merck's revised plan?

2. What problems under the old system are solved or mitigated by the new system?

3. What new problems arise under the new program?

4. When might relative performance systems be preferred?

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