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Temporary pay increases, such as bonuses, can be awarded based on individual productivity or through gainsharing, which distributes savings to groups or the entire organization. Performance awards resemble merit increases but are competitive and not added to base salaries. They are commonly used at the federal level and for executive compensation in state and local governments. Gainsharing plans allow the organization and employees to share unexpected gains from productivity or cost reductions. This method aims to align rewards with performance and necessitates a high level of organizational trust to be effective.
