According to the 2007/2008 U.S. Compensation Planning Survey from Mercer HR Consulting, "Despite the strengthening economy and growing job market, salary increases will remain steady in 2007 and into 2008." We will discfuss some of those rate increases later in this article. The survey included responses from more than 1,000 employers across the United States with pay practices for more than 12 million workers.



The survey showed that employers in the U.S. will award, on average, a pay increase of about 3.8 percent. According to previous data this is just a little more than the 3.7 percent awarded in 2006. According to Stephen Miller of HR Magazine, "Mercer is projecting that pay increases will remain flat at 3.8 percent in 2008." A finding, Miller claims, "is in line with the World at Work Salary Budget Survey, which found U.S. companies planning an overall salary budget increase of 3.9 percent in 2008."

Employers across the U.S. are still a little leary on increasing payroll, which will increase their budget, shrinking their bottom line. In return, employers have shown to place a greater emphasis on company top performers by offering performance incentives, which will be discussed in a little bit.

According to Mercer`s survey, employees who are considered high performers will receive an average increase of about 5.7 percent, those that are considered average will receive about 3.5 percent and below average performers will receive a mere 1.7 percent. All of these figures of course are for 2007.

Incentives are a great way to motivate and keep your top performers as well as get the average and below average employees to perform even better. The Mercer survey revealed a variety of difference incentives. For example, higher performing managers are expected to receive payouts in bonuses of around 27 percent while below average performers will only receive 10 percent. A huge differential, and definitely a motivator.

Steven E. Gross, global leader of Mercer`s performance and rewards consulting said recently in HR Magazine that, "Incentives are a useful tool for supporting high levels of performance with out increasing the fixed cost of base pay."

The survey also showed that 86 percent of companies did offer short term incentives and since 2004, 22 percent have increased employees eligible for these incentives, and that payouts, on average are higher then in previous years when the survey was conducted.

The Mercer HR Consulting Survey revealed the following statistics for budgeted pay increases for 2007 and 2008.

In 2007 All Employees will receive an average of 3.8 percent, executives 4.1 percent, management, 3.8 percent, professional (sales and non-sales) 3.8 percent, clerical/office, 3.7 percent and trades/production/service receiving 3.6 percent. In 2008, some budgets will increase while a couple stay the same, with only executives showing a decrease. For example, all employees, office/clerical and trade/production/service will remain steady in 2008 with their same increase in 2007, executives and professionals will drop from 4.1 to 3.9.

One thing is for sure, the job market is on the rise, but with a slumping economical market in some areas, it looks like employers are still a little leary about that bottom line until they know their respective industries are booming again.

By: Bruce A. Tucker