Is a 5% Raise Enough to Protect Your Superstar?
In a word, NO. In two words, "H*** NO".
Of course, you know that. But, even if you and the rest of the world understand the risk, most of us are
still plodding along with a merit system that doesn't protect stars. Each year, we see the details regarding merit pay from World at Work, via their annual salary budget survey. The 35th version of this annual survey (which includes over 2,700 participating organizations) was recently released, showing the following:
-The 2008 actual average increase in salary budgets was 3.9%, and the survey projects a 3.9% increase again in 2009. Good news in a bad economy.
-For the third consecutive year, participating organizations are reporting that, on average, 91% of employees can expect to receive an increase in their base pay this year.
-High performers can expect raises of over 5% while below average performers can expect 2% or less.
Good news on the salary budget growth front, and that most companies are still doing merit increases in a down economy.
As for the average increase for high performers, 5-6% is nice, but it won't protect your best talent. Remember that the best time for employees to get a double digit increase is when they accept an offer to leave your company, and many recruiters actively do the math to figure out what type of offer it will take to steal your star.
So, when I read this, I'm thinking not about the masses. I'm thinking about the stars, and looking in the sofa for spare change to make them feel different.
