While 2004’s merit budgets put a stop to a trending downward of budgets over the past couple of years, 2004’s numbers are down from the projection employers offered in 2003 for a slight 0.2% increase to merit budgets this year, according to WorldatWork’s update of the 2003-04 Salary Budget Survey.
Also, whereas last year’s decrease in salary budgets was attributed an ongoing sluggish economy, 2004’s steady rates are somewhat of a head scratcher ( See WorldAtWork: Salary Budgets At 3.5% in 2003 ) . In the update, half of the respondents said that economic conditions were better than last year. However, 33% of the respondents to the update said their companies would be adjusting their merit budget estimates from mid-2003 and 75% said the changes would be downward.
Most likely to feel the pinch are exempt, salaried workers. Non-exempt, hourly wage earners are the least likely to be affected.
Not likely to be touched in 2004 are variable pay awards – incentives such as cash incentives, stock options, and bonuses. More than 75% ofrespondents did not anticipate any change in 2004 to either variable payawards or budgets. Exempt salaried workers and executives are morelikely to receive a variable pay award in 2004 than previous year and non-exempt employees are actually less likely to receive variable pay awardsin 2004.
The full survey report is available for purchase from WorldatWork at (877) 951-9191.