Managers Offering Larger Raises to Compete

 
 
By Dennis McCafferty  |  Posted 09-18-2013 Email
 
 
 
 
 
 
 
 
 
  • Previous
    1-Senior Leaders
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    Senior Leaders

    Salaries for executives are expected to increase by 3% in 2014, compared to 1.4% in 2009.
  • Previous
    2-On the Payroll
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    On the Payroll

    Pay for salaried employees should also increase by 3% in 2014, compared to no more than 1.9% in 2009.
  • Previous
    3-Clock Management
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    Clock Management

    Nonunion, hourly workers will get a 2.9% increase in pay in 2014, as opposed to 2% in 2009.
  • Previous
    4-Meritocracy
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    Meritocracy

    Top-performing employees are getting 4.7% in average increases this year, which is twice the amount of average workers.
  • Previous
    5-Underperformers
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    Underperformers

    Employees who don't meet expectations get less than 1% in pay raises.
  • Previous
    6-Prove It or Lose It
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    Prove It or Lose It

    90% of companies offer "variable pay" programs—or performance-based awards that must be re-earned every year—compared to just 78% that did so a decade ago.
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    7-Results-Based Benefit
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    Results-Based Benefit

    Those companies expect to pay 12% of payroll on variable-compensation programs, up from 9.5% a decade ago.
  • Previous
    8-Top Cities for Raises?
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    Top Cities for Raises?

    These include Kansas City and Denver, where workers are commanding 3.2% increases.
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    9-Bottom-Feeders
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    Bottom-Feeders

    Workers in pricey cities like Boston and New York are seeing only 2.8% in paycheck increases.
 

CIOs and other managers will need to budget more for raises to keep retention levels high, according to recent research from Aon Hewitt. While forecasted raises for the next year are by no means lavish, they represent a sizable increase from those seen during the recent recession. Meanwhile, organizations are setting aside considerably more funding to provide performance-based awards which must be re-earned every year. This ensures that pay is directly tied to clear contributions to company goals. "While it appears that pay levels are slowly rebounding, companies continue to hold the line on fixed costs," says Ken Abosch, leader of compensation, strategy and market development at Aon Hewitt. "Instead, they are executing on a pay-for-performance vision that rewards employees based on a mix of business and individual results." As for one place where budgeting can be diverted? That would be increases for workers who don't meet expectations. Yes, believe it or not, they still are earning raises, albeit, small ones. "This waters everyone's increases down," Abosch says. "Organizations should reallocate that money toward those who have helped achieve strong results." Nearly 1,150 companies participated in the research. For more about the findings, click here.

 
 
 
 
 
Dennis McCafferty is a freelance writer for Baseline Magazine.

 
 
 
 
 
 

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