Looking for a Raise in All the Right Places - Performance-based pay

Sept. 8 2008

Looking for a Raise in All the Right Places

http://alexandralevit.typepad.com/wcw/2008/09/looking-for-a-raise-in-all-the-right-places.html

According to the Associated Press,
U.S. workers can expect skimpy raises in their base salaries next year,
but top performers may still fatten their paychecks with merit
compensation.

A study just released by Hewitt Associates,
a human resources consulting firm, found base pay will rise by 3.8
percent in 2009, marking the seventh consecutive year of flat growth.
One-time performance-based pay, however, is expected to grow by 10.6
percent. That's down slightly from 10.8 percent this year and 11.8
percent in 2007.

“Performance-based
rewards are popular since they don't commit companies to ongoing
costs,” said Ken Abosch, the leader of Hewitt's compensation consulting
business. The survey, which was based on interviews with more than
1,000 large organizations, measured one-time performance-based awards
and did not include raises based on performance.  "Most
of the compensation growth today comes from (one-time merit-based) pay
— it accounts for almost three-quarters of the increase," Abosch said.  “That's opposed to a decade ago, when base pay accounted for the majority of yearly compensation growth.”

The
most common one-time performance-based rewards were signing bonuses
(used by 65 percent of companies), followed by incentives (63 percent),
special recognition awards (56 percent), individual performance awards
(41 percent) and retention bonuses (39 percent), according to the
study. The industries expected to see above-average salary increases
next year are accounting and consulting (4.6 percent), energy (4.5
percent) and construction and engineering (4.5 percent). Almost no
companies are cutting salaries, although some may be reducing their
head count, Abosch said.

Interesting
news, especially in this economy. Do you know what merit compensation
you are entitled to besides the official annual raise?  It
may be time to find out, and that can be as simple as a casual call
into HR to ask what the merit compensation policies are in your
organization, and then making a concrete plan with your boss regarding
how you can work toward achieving a bump in 2009.