While most employers (94%) typically raise workers’ pay after a promotion, only 11% of businesses are awarding cost-of-living adjustments, according to a recent survey.
WorldatWork gathered data from 1,381 employers between June 6 and July 2, 2010, asking various questions about pay raises and salary adjustments, for its Compensation Programs and Practices report.
It revealed that the majority hand out merit increases (96%) and do market adjustments (76%). But when it came to cost-of-living increases, employees weren’t as fortunate.
“From a rewards perspective, it doesn’t make sense to base pay raises solely on the Consumer Price Index,” said Kerry Chou, CCP, compensation practice leader at WorldatWork. “Pay raises are a tool to motivate and retain employees. How motivating can it be for a top performer to receive the same base pay increase as a low or average performer?”
Most respondents (89%) also indicated that they hand out salary adjustments based on individual performance, as it pertains to job standards and/or Management by Objectives (MBO).
The survey included a significant number of responses (44%) from large employers at companies of more than 5,000 workers.
