While overall average salary increases are projected to be modest (approximately 3.7%) in 2007, U.S. companies report plans to deliver significantly higher increases to top performers while holding middle-rated employees to below competitive increase amounts, according to a survey of 227 large and mid-sized employees by Mercer Human Resource Consulting.
According to survey respondents:
- The top 12.8% of workers (performance-wise) will get an average pay increase of 5.4%.
- The next highest 26.2% will get an average raise of 4.4%.
- The middle-rated 52.9% will get an average increase of 3.3% (note nearly half a percent lower than the competitive norm).
- The lowest rated 2.9% will average raises of 1.4%
These figures appear to reflect the acceptance by these organizations that true differentiation (the foundation of any merit pay program) in an era of limited funds means rewarding top performers at the expense of the rest, most notably those who are simply "meeting standards".