Do you think all raises should be based soley on merit?

Soley, no. In part? Absolutely. Each employee should get a flat increase annually with an added percentage based on merit. Some jobs really don’t lend themselves to “merit”, other than doing the job the way it’s supposed to be done.

no, unless their job is to have merit…

Not unless cost of living is only increased with raises.

No—cost of living increases are important and fair.

Yes, COLA’s are not raises.

There comes a point where additional years no longer make the employee better or all that much more experienced at their job. At this point, the employee is no longer adding value to the company, they are simply maintaining value. If they are not adding value, there is no added money coming in with which to pay a raise.

In a growth economy, a company may well raise that person’s pay in order to keep a valued employee. In a stagnant or downward economy, a company may well not want to humor the employee any longer, and may even feel that the extra years are not as valuable as a lesser-experienced employee who is still competant, but cheaper.

If I were an “overpaid” employee in this context, it would be very tempting to avoid asking for raises in order to keep my job altogether. And from a company’s point of view, I can see how an employee might no longer warrant raises, once the point of diminishing returns is reached.