The leaders of educational institutions are using different strategies to enhance the performance of their institutions. Two common strategies that are using for teachers are pay for performance and merit pay incentives. Both terms easily confuse the leaders of institutions because they are using these terms sometimes interchangeably. So they should know about h exact definitions of these both terms. Or they also should know about the differences and similarities among these terms. In this way, they can use these strategies in a better or understanding way. However, this article will discuss both strategies' definitions, advantages, and disadvantages and their differences and similarities. Merit Pay It is an approach that rewards with additional pay to those teachers that are high performing, or it is also called sometimes incentive pay. It acts like a tool that helps teachers to contribute to institutions with the best performance highly. However, merit pay also has benefits and challenges for both teachers and leaders of institutions. So first, they start to implement this strategy; they must know about the benefits or challenges. Benefits of merit pay incentive The merit pay system becomes more applicable when a lot of data is present to measure the employee's performance. They have some following benefits. Merit pay communicates with the objective of institutions A powerful message sends merit pay to the employees how the leaders want them to be performing and contribute to better performance. It also helps teachers to recognize their performance. It is more useful for those teachers that actively participated with higher performance. • Through merit pay system, teachers can see where they are standing The merit pay system makes a range that is available to employees publically. Through these ranges, they can measure where they are stand. What they should need more to make their performance better. • It develops the attention of teachers. Through the merit pay system, it is easy to differentiate among low or high-performing teachers. Or when the high-performing teachers are getting rewards, then it also makes attention to those teachers that are low-performing teachers. In this way, teachers are trying to make their performance better. Challenges of merit pay incentive Merit pay system has some following challenges: • Uses resources or time to make a better merit pay system The institutional leaders are spending more energy, resources or time to establish or maintain a merit pay system in their institutions. The efforts that they are spending in this system it not benefited all time well. • Communication difficulties The contributions of teachers depend on the ability of leaders that communicate with these teachers. Some leaders have more ability to communicate. So it is also a challenge for the merit pay system when leaders don't have the proper skills to convey their message to teachers they cant understand them. Pay for Performance Pay for performance is an approach in which employees get a salary on their organization's performance or their own. It is consists of annual pay that increases based on performance. Benefits of pay for performance Following are some benefits of pay for performance: • It establishes values of institutions It is providing goals for teachers to achieve. In this way, teachers can understand their position in these institutions and what their role will be. When teachers are working with this understanding, their performance will increase, increasing the values of institutions. • It boosts teachers' morale and motivation. When teachers are rewarded well due to their performance, this reward will become the best tool for their motivation. Pay for performance system to enhance the morale of teachers. Law assignment writing service has the payroll for professionals as per their performance which really appreciates them and motivates them to perform better. • It enhances productivity Through this approach, employees are trying to work more to receive more salary. When they start working more effectively, then the productivity of any company or institution will increases. • It attracts better teachers. When teachers look for more facilities or access to this approach in institutions, they prefer to start teaching in these institutions. So in this way, institutions can attract better teachers or enhance their performance with a better reputation. Challenges of pay for performance There are some following challenges of pay for performance • Teamwork is affected by this system When teachers are trying to make their performance better individually, then teamwork is affected by this behavior. Most of the performance of any institution or company depends on teamwork. When teamwork is strong, then the institutions are also becoming strong. • It becomes changes difficult. Once employees become used to rewards or enjoy this system's advantages, then ending this system or making changes is complicated. So when they start to implement this system, leaders should make trial tests like the amount of pay or working goal will be better for productivity or not. So if they are testing this system, then they can make changes easily later. • It highlights the deficiencies of teachers. Through this system, the performance of teachers becomes clear. In this way, they also notice teachers who are not performing well due to not proper knowledge, training or experience. So leaders should develop more resources and additional training to provide all teachers same abilities and skills. When all teachers have the same abilities, then productivity will also increase. With proper opportunities, they should establish this system. Similarities among pay for performance and merit pay incentive pay for performance and merit pay incentives allow any institution or organization to award their employees on their performance. But pay for performance rewards both organization and individual performance or merit pay incentive rewards only the base of individual performance. Both strategies, when implementing properly, then have challenges. Differences of pay for performance and merit pay incentive The big difference between merit pay incentives and pay for performance is that performance pay is based on organization, team or individual performance. In contrast, merit pay incentives only include individual performance. Merit pay incentive system mostly offered as a reward of one-time. But the pay-for-performance system is typically offered for a long-term or ongoing program. Pay for performance depends on payment plans for long-time, while merit pay incentive depends on incentives and bonuses. However, these are important strategies that help to increase the performance of employees and productivity of organizations. But in the implementation of these strategies, one should be careful. After getting proper knowledge or understanding about these strategies, then leaders should start to implement them.