Mercer: Pay Raises Expected to be 3.8% in 2007

August 15, 2007 ( - U.S. employers plan to increase salaries by 3.8% in 2007, only slightly more than they did the year before, according to Mercer Human Resource Consulting.

class=”NormalIndent2″> Employers granted 3.7% pay increases in 2006 and pay is slated to remain stagnant in 2008 at 3.8%, according to the consultant’s “2007/2008 U.S. Compensation Planning Survey” of 1,000 employers in the U.S.

class=”NormalIndent2″> The survey found that even though pay increases have seen little change, pay gains compared to inflation are projected to be the best they’ve been in five years. This means that raises could be worth more in 2007 and 2008, if a forecast dip in the Consumer Price Index (CPI) occurs.

class=”NormalIndent2″> Employers are giving larger salary increases to high-performing employees, compared to those in the lower performing categories, with top workers expected to get 5.7% base pay increases in 2007 compared to 3.5% for average performers and 1.7% for those with the weakest showing.

class=”NormalIndent2″> Incentive payments for 2007 were higher than 2006. The highest performing managers are expected to receive average short-term incentive payments of 27% compared to 10% for the lowest performers. Similarly, incentive payouts for high performing office/clerical/technical positions (15%) are nearly three times that of the low performers in the same group (6%).

class=”NormalIndent2″> Thirty percent of companies are considering formal career planning as a means to continually developing internal talent, while 16% of the companies are considering the use of multi-rater feedback and 13% are considering competency-based performance management.

class=”NormalIndent2″> To purchase the full report visit .