Helping a client through the following academic exercise - it's an interesting one:
Is Corporate Meritocracy Dead As Soon As a Merit Matrix Arrives On the Scene?
What do you think? My gut tells me that when a company is very small (under 100 employees), meritocracy is at its purest. The owners of the business have the best sense possible on who adds big value, who can be easily replaced and who really helps grow the business.
Then, at some point between 100-300 employees, the company grows to the point where the owners have reduced line of sight to which people are most valuable. Around this time the owners are no longer scalable in this regard, and in come the professional managers of people. With that comes a need for control and a sense of fairness.
It's at this point that some form of merit matrix comes into play, usually linked to an annual performance review. The highest performers get 4-5%, the masses get 2-3% and BOOM. The ability to truly reward the people who add the most value is dead.
But the culprit in all this isn't necessary the merit matrix tool. The villain is inefficiency in measuring performance through an increased number of lenses.
When the owners were close enough to the game, performance was measured through a small number of lenses. That kept consistency high.
But when the number of employees went up and necessitated the arrival of professional managers, the number of lenses went up.
The use of the merit matrix isn't the problem.
The problem is that the more managers you have, the less true, linked meritocracy is possible.
You can't cut down on the number of managers, so what's needed is a real world definition of meritocracy.
The definition probably gets the span of control back to 100-employee blocks, without being constricted by a corporate merit matrix.