NEW YORK (CNN/Money) - Salary freezes have all but disappeared for millions of American workers, according to a published report that says companies are lifting pay caps and even slightly increasing raises.

USA Today, citing a July survey by Mercer Human Resource Consulting, said that only 2 percent of employers now have freezes that cover some or all employees. That's down from 16 percent, or about one in six employers, who had imposed freezes, according to the 2002 survey.

The newspaper reports that the improving economy and concerns about losing employees to competitors in a tighter labor market has prompted the higher pay.

More employers are supplementing salaries with cash awards, signing bonuses and other incentives, according to the report. It reported the bonus payments, which can be tied to the completion of a project, helps employers try to motivate employees with money without permanently boosting pay scales.

But pay scales are also creeping higher. The average pay increases in 2005 and 2006 should come in at 3.6 percent, the newspaper reports. That's a slight increase from a year ago, when raises averaged 3.5 percent. The survey of nearly 1,350 employers covering almost 13 million employees found that executive-level employees are getting average raises of 3.9 percent, compared with 3.4 percent pay hikes for non-union hourly workers.

Salary freezes are still in place for non-union workers in industries facing challenges, such as autos and airlines, Ravin Jesuthasan of professional services firm Towers Perrin, told the newspaper.

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