Communications of the ACM
Expect Pay Raises to Return Next Year
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After a year of economic uncertainty, many American workers and managers will be able to look forward to pay increases and bonuses again in 2010, according to new research by consultancy Watson Wyatt. Some firms may even move to bring pay levels back to what workers could have expected if there had been a raise during 2009 as well. Its poll of 235 large American employers has predicted pay will rise on average 3% next year, after a year in which raises were largely put on hold. The number of companies planning no pay raises next year is also expected to drop dramatically, down from 25% of companies this year to 10% in 2010, according to a separate poll of nearly 900 firms by Watson Wyatt Data Services.
After a difficult past 12 months, the good news is that employers plan to give larger raises next year, and many plan to reinstate previously cut pay raises as planning for an eventual economic recovery continues. In return, there will likely be a much closer relationship between performance and pay in the future. Companies in general were already giving smaller raises to employees who did not meet performance expectations. Workers who "exceeded expectations" this year would receive an average of 3.1% increase, while workers who "far exceeded expectations" could expect a 4% increase. With companies operating on limited budgets, employees can expect their performance on the job to come under increased scrutiny.
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