REWARDING PERFORMANCE
US pay practices returning to business as usual
As the US economy becomes steadier, corporate America is signalling a return to "business as usual" pay practices, according to research by Mercer Human Resource Consulting.
The 1,100-company survey suggests that pay increases for both 2002 and 2003 will be pitched around 4% for all employee groups, just slightly ahead of inflation.
Getting the best return on your investment
But even with pay increase budgets returning to more normal levels, employers still struggle with how to how to allocate pay increases among employees. "A pay increase budget of 4% doesn't necessarily mean that all employees should get raises of 4%," says Steven E Gross, who leads Mercer's US compensation consulting.
"Employers need to identify the employees who are most productive and those whose skills are most critical to the success of their organisation, and reward them accordingly. If you don't, you're not getting the best return on your investment of compensation dollars."
Communication challenges
This approach, however, creates communication challenges that employers must address. "There are no secrets about pay," Gross says. "Your employees will know that some of them are receiving larger raises than others, and in a pay-for-performance environment this is perfectly valid. The important thing is to communicate in advance what performance you expect and how you will allocate salary increases based on that performance. In essence, it's telling your employees: if you perform, we pay."
Want to know more?
Title: 2002/2003 US Compensation Planning Survey, Mercer Human Resource Consulting.
Availability: The report is available for purchase at www.imercer.com.
Mercer Human Resource Consulting is a global firm that helps organisations create business value through their people . With more than 13,000 employees in some 40 countries and territories serving clients worldwide, the company is part of Mercer Consulting Group, a wholly owned subsidiary of Marsh & McLennan Companies, Inc.,
For more details visit Mercer online at www.mercerhr.com.
Posted 7 July 2002