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Sweating out a 2000 raise
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September 6, 1999: 1:40 p.m. ET
Survey: Modest hike in pay boosted by variable compensation plans
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NEW YORK (CNNfn) - Chances are you may have to work a little harder for that big raise next year, according to a management consulting firm's survey released Monday.
Salaried employees can expect a modest raise of 4.2 percent next year, while salaried non-exempt employees can expect a 4.1 percent bump, according to the 1999 Hewitt Associates Salary Increase Survey. Executives will most likely receive an average 4.4 percent increase.
However, U.S. companies plan to compensate for the moderate salary increases by boosting spending on variable compensation plans, or performance related rewards, by roughly 16 percent.
Ken Abosch, compensation business leader for Hewitt Associates, said compensation plans have become more attractive to employers because they boost productivity, while lowering fixed costs.
"Variable pay is attractive because the plans are self-funding, paying out awards when individual, group or business goals are attained," Abosch said.
Abosch noted the plans can also help boost morale because they give employees the chance to share in the company's success.
Hewitt surveyed 1,133 employers nationwide for its survey, now in its 23rd year. Roughly 70 percent of those employers said they offered at least one variable rate plan in 1999, up from 47 percent in 1990.
Special recognition awards tended to be the most common plan offered, followed by business and individual performance incentives, Hewitt said.
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Hewitt Associates
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