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The end of the compensation ice age?

Christian Schappel
by Christian Schappel
October 13, 2010
1 minute read
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This could become known as the great Fall Pay Thaw of 2010, if the forecasts from a new study prove to be accurate.
More than three out of every four companies (76%) that froze pay in the last year and a half say they’ve either lifted their pay freezes or intend to do so by the end of the year, found a recent study by Buck Consultants.
Buck’s study, Compensation Planning for 2011, took an in-depth look at more than 200 companies across nearly every sector of the U.S. economy and found that between 70% and 80% of employees can expect pay raises this year.
According to the study, employee salaries will increase by an average of 2.8%, up from 2.5% in 2010 and 1.8% in 2009.
But when it comes to the corporate suite, the outlook isn’t as bright — only 57% of executives should expect a raise in 2011.
Pay-for-performance
The vast majority (87%) of organizations still incorporate pay-for-performance components in their overall compensation strategies, and bonuses paid for performance in 2010 to executives, directors, managers and other exempt employees are expected to exceed 2009’s totals.
In addition, more companies are changing the way they manage base pay. For example: In 2010, more than one-third of employers reallocated merit funds from low performers to high performers. In 2009, only 1 in 10 companies could say that.
How do these findings compare to what your company is doing? Let us know in the Comments Box below.

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