Merit means "worthiness or excellence." If you receive a certificate of merit in school, you are being recognized for doing a good job. As a verb, merit means "deserve." Your certificate might merit a prominent place on your bulletin board!
You will often hear the phrases merit-based promotion and merit-based pay, which come up when employees are pushing against a system in which time on the job––and not job performance––determines when workers are promoted and how much they are paid. Using the word merit suggests impartiality and objectivity––such as when you swear off a prejudiced approach to something and vow to "judge it on its merits."