A I am not surprised you have had a problem – you guessed right – it is caused by human nature. Our business doesn’t have a formal salary structure and, years ago, we abandoned our appraisal scheme. I know these decisions fly in the face of conventional management practice, but a less formal approach works well for us. Every colleague needs the opportunity to have regular meetings with their boss, but we found that a formal appraisal process produced a false impression. With managers following a set format, great colleagues were told about their few weak points and poor performers encouraged by unwarranted praise. When this process was abandoned, the management team gave a huge sigh of relief. Our managers and colleagues now have appraisal type meetings when they want them. As a result we can look at each individual and pay the best people more than the mediocre. If you abandon your current scheme don’t go back to paying everyone the minimum wage – pay individuals what they are worth. Reward star performers with an occasional surprise bonus and word of personal praise.