Salary Increases Holding Stable for 2009; Pay for Performance Increasing, Finds Buck Consultants Survey

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Salary budgets not broadly affected by recent economic developments.

In an uncertain economic climate, incentives linked to key performance indicators enable employers to focus the efforts of their people and help control compensation costs.

Average salary increases for fiscal year 2008 and increases planned for 2009 are consistent with plans developed last year, despite current economic uncertainty, finds a Buck Consultants survey. Buck’s annual survey of U.S. employers, “Compensation Planning for 2009,” indicates average salary increases for 2009 range from 3.8 percent for non-exempt and non-management professionals to 4.0 percent for executives to 4.1 percent for CEOs.

Buck Consultants, an ACS company and one of the world’s leading human resource consulting firms, conducted its survey in mid-2008. The survey includes responses from 314 employers, representing virtually every sector of the U.S. economy. It examines salary increase budgets, short-term incentives, and pay for performance practices.

In September, follow-up questions were sent to participants to determine if recent economic news prompted any changes to salary budgets and year-end incentives for next year.

102 of the original 314 survey participants responded to the follow-up questions; 16 percent of which reported that their plans have either been changed since mid-2008 or are now under review. The 2009 average salary increases for employers revising their plans are: 3.0 percent for non-exempt employees, 2.9 percent for non-management professionals, and 2.5 percent for executives. For companies changing their salary budgets for next year, salary increases have dropped by as much as 30 percent for executives and 19 percent for all other employee groups.

Seventy-eight percent of respondents offer one or more short-term (typically annual) incentive plans. Short-term incentive participation is highest among CEOs (95 percent), executives (92 percent), directors (90 percent), and managers (85 percent).

Buck’s survey reports a slight shift away from individual and discretionary bonus plans to plans that link payouts to business unit, group, and team performance. The most prevalent types of incentives are those that combine business unit and group/individual performance (almost 50 percent) and those based just on business unit results (approximately 20 percent).

Recent economic news has affected anticipated incentive payouts. Although half of the survey respondents report that payouts are likely to be “similar to last year,” 26 percent believe payouts will be smaller and five percent report that fewer managers and employees are likely to see incentive awards.

“Group and team incentives are powerful tools to improve performance,” said Larry Reissman, principal at Buck Consultants. “In an uncertain economic climate, incentives linked to key performance indicators enable employers to focus the efforts of their people and help control compensation costs.”

The increased importance of pay for performance practices is evident across several trends in management practices, covered in Buck’s survey:
· Last year 4.1 percent of survey respondents reported they did not have a pay for performance philosophy; that percentage is now down to 2.3 percent.
· The percentage reporting a merit salary increase policy that considers individual performance to determine the size of the increase is now 90 percent, up from 86 percent last year.
· Promotions are based on an individual’s past performance in 75 percent of the organizations, up from 69 percent last year.
· Sixty-four percent now consider individual performance to determine bonus or short-term incentive awards, up from 58 percent last year.

Buck Consultants, an ACS company, is a leader in human resource and benefits consulting with more than 1,500 professionals worldwide. Founded in 1916 to advise clients in establishing and funding some of the nation’s first public and private retirement programs, Buck is an innovator in the areas of retirement benefits, health and welfare programs, human capital management, and employee communication. News and other information about Buck Consultants are available at http://www.buckconsultants.com. Buck is an independent subsidiary of Affiliated Computer Services, Inc.

ACS, a global FORTUNE 500 company with 65,000 people supporting client operations reaching more than 100 countries, provides business process outsourcing and information technology solutions to world-class commercial and government clients. The company's Class A common stock trades on the New York Stock Exchange under the symbol "ACS." Learn more about ACS at http://www.acs-inc.com.

Buck’s survey report, “Compensation Planning for 2009,” is available to the media by contacting Ed Gadowski at 201-902-2825. It is available to other interested parties for $200 from Buck’s Global Survey Resources, 500 Plaza Drive, Secaucus, NJ, 07096-1533. Telephone 1-800-887-0509. It can also be ordered online at http://www.bucksurveys.com.

Media Contact:
Ed Gadowski
Media Relations
Buck Consultants, LLC
201-902-2825
Edward.gadowski(at)buckconsultants.com

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

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Edward Gadowski
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