The other reason for higher salary is based on the performance of the employees. If the employee generates more revenue, they may be given higher compensation as a reward which will also act as an incentive for future improved performance. This is usually the case for sales department whereby the pay can be based on commission. Basing on the red-circling, higher compensation can be given to the employee i.e. specific reasons such as disability are attributed for the higher salaries. In this case the employee can be performing work which requires low pay since the higher paid work cannot be performed by the employee (Pay Equity Commission). A merit system can be used to incorporate the productivity as a measure for pay increase. The employees who exhibit exceptional performance are rewarded. To ensure validity of this program, criteria with predetermined objectives like accuracy, efficiency and ability is used to evaluate the employees regularly. The subjective ratings of the supervisors can be used as the base for employee evaluation however to ensure the bona fide system requirements are met, there should be close evaluation...

A productivity or incentive system can also be used to incorporate productivity as a measure of increase of pay. The employees get rewarded on the basis of the quantity or quality of production. For instance, a clerk who works on word processing of documents can be paid depending on the rate of the document produced or the total monthly sales of a sales person can be used to determine the commission to be paid to the employee in that month. This will ensure the system is not equitable but the disparities are based on the performance of the specific employee thereby giving an equal chance to all the employees to get high compensation.
References

Garvey, Charlotte. 2005. Philosophizing Compensation. HR Magazine, January.

Nwachukwu, Saviour. 1996. Perception of Equity in Compensation Practices: A Research Note.

Equal Opportunities International 15: 36 -- 45.

Pay Equity Commission. Guideline No. 2: Permissible Differences in Compensation. Pay Equity

Commission Library. http://www.payequity.gov.on.ca/peo/english/guidelines/ge_12.html