Results of the survey show that the median planned 2002 merit increase is 3.8% to 4.0% for all employee groups, slightly shy of 2001 actual merit increases.
Key findings of the survey include:
- one-fifth of the respondents are planning to reduce their merit budget in direct response to the recent economic slowdown and/or the events of September 11,
- almost two-thirds cited the overall labor market conditions as a major factor in determining the 2002 merit increase budget,
- a little under 60% are not planning any new changes to the base salary component of their compensation programs,
- half expect 2001 bonuses to be less than 50% of target, with nearly half of those anticipating no bonuses this year at all, and
- almost 30% are implementing new programs to retain valued employees
Anderson found that companies are proceeding with ‘normal’ merit increases for two reasons:
- the prospect of low or no bonuses, and
- the fear of salaries falling below the market
The sample comprised 57 companies with median revenues of $1.5 billion.