Merit system is good, to improve the quality of posting a member, so with merit, posting members not just to meet the individual targets in the campaign.
No doubt about this, and this is why the admin introduced this merit system.
But I think merit is not very effective if given by fellow members, it's good if the merit is given by the moderator, maybe it will be fairer because each person or member has different views in assessing the post quality or not 
Now there are both advantages and disadvantages of merits being given by fellow members. The benefit is that by allowing fellow members to give merits to posts of other person, the work load on the staff is reduced. Indirectly, the members are moderating the good posts by giving them merits. But the disadvantage of this feature is that some members are not honest and are thus giving those merits to alt accounts.