With the overall positive growth outlook employees are hoping for a better salary increment this year, meanwhile according to Buck Consultants’ seventh annual Compensation Planning Survey, average base pay increases for 2014 will remain at 3% among US companies for the second year in a row, and with many companies emphasizing on performance-related pay the increment will depend on the productivity of both the employee and the organization.
As per the most recent survey conducted by Mercer from nearly 1500 mid-size and large organizations in US, which included executive, management, professional (sales and non-sales), office/clerical/technician, and trades/production/service; high performers particularly in the field of Information Technology and Medicine received an increment of about 4.6% and average performers received 2.6% in the year 2013. Experts ...view middle of the document...
Pay for performance method is slowly altering the corporate culture for many organizations to one of teamwork and result oriented workforce. Following are few of the key observations;
• The performance management system seems to be getting tougher, as salary increment for an employee depends on when his or her team, department or when the organization accomplishes certain production and quality benchmarks.
• Since increments are to be given out at a particular time of the year, it is proving to be a convenient and friendlier method for planning an organization’s budget. The money required can be budgeted in advance and incase the goals are not met, it can be retained for the next possible increase.
• Better salary increment could be a motivating factor for top performers and thus organizations might be able to retain them. Organizations are also focusing on rewarding and recognizing them by providing higher pay increases along with other non-cash rewards such as training opportunities and career development initiatives.
• Organizations are investing in a variety of practices to strengthen employee engagement and help improve work-life balance. According to Mercer’s survey, some of the more prevalent practices include sponsored conferences, professional development events, additional non-monetary recognition awards, and enriched job sharing/flexible hours.
From among the organizations that participated in the Buck survey, it was found that retaining top performers seems to be the top priority and they have no plan for major hiring activity for 2014. About 19% of the respondents plan to hire the same as in 2013, 57% of them responded that they plan to provide new career development opportunities, 25% plan to increase base pay and 23% plan to offer larger incentives.
- Business Management Daily
- MNI - Deutsche Boerse Group
- Market Watch – The Wall Street Journal
- Business Insider