If you are lucky enough to have a job, you should see a base pay increase of about 3 percent next year, about the same as this year’s projected 2.9 percent, according to a new survey. But pay increases will vary according to performance as companies try to retain top talent while struggling with anemic revenue growth in a sluggish economy, according to the report from Mercer, a consulting firm.
“Differentiating salary increases based on performance has become a necessity with limited resources,” said Catherine Hartmann, a principal with Mercer. “In this less-than-robust environment, top-performing employees are an employers’ competitive weapon and they are doing their best to reward them accordingly.”
As a result more than two-thirds of employers in the survey said they use some type of pay-for-performance program to differentiate pay and retain top talent. And the gap in pay between the highest and lowest-performing employees is likely to widen.
Top-rated employees are likely to see average pay raises of 4.4 percent, while the lowest-rated employees typically will see pay virtually unchanged.
Mercer surveys 1,200 large and midsized employees representing 12 million workers for the annual survey, which has been done for more than 20 years. For more details on the survey, click here.