Merit increases on the way back

Dear HR Professional:

Given the times, you probably want to be cautious about ramping up on salaries even as business improves. But there’s one area where your organization might want to look at going a little more quickly: merit raises.  

Rebound seen in 2010
According to Watson Wyatt’s 2009-10 Strategic Rewards Report, budgets for merit raises are likely to rebound in 2010 after being squeezed in 2009.  Average merit increase budgets, as a percentage of salary, shrank from 3.5% in 2008 to a projected 2.0% in 2009.  But in 2010, the 235 employers surveyed by Watson Wyatt expect to give an average of 3.0% of salary to merit raises.

Dave Clemens
Editor-in-Chief
HR Cafe Newsletter