Many companies are planning to loosen the purse strings for employees’ merit raises this year, according to new research.
The average merit hike will be 3.0% in 2011, according to HR consulting giant Towers Watson. Last year’s average raise was 2.7%.
Before the current financial crisis hit, increases typically averaged between 3.5% and 4.0%, Towers Watson said.
Although the picture’s brightening for a lot of employers, some are still feeling the pinch, according to the survey: 5% plan to freeze salaries for all workers this year, the same percentage as last year.
In 2010, the largest merit increases (4.0%) went to workers who far exceeded their performance expectations, while those who exceeded expectations received a 3.4% average increase.
No big surprise here: Workers who didn’t meet performance expectations got no raises in 2010, Towers Watson said..