There are seven basic merit allocation strategies, says Consultant Whitney Herrington. Compensation managers should be familiar with them all, including when they are appropriate (and when they are not).
Category Archives: Compensation Planning
Employers have myriad options when it comes to designing a compensation plan, and they must consider and how it will fit into their overall strategy for recruiting and retaining employees. This group of Compensation Daily Advisor articles will provide you with how to information on managing job evaluation, interpretation of survey data, setting of rate ranges, determining individual pay rates, and much more.
Yesterday’s Advisor featured the first 5 of Consultant Whitney Herrington’s 7 alternatives for deciding on merit pay. Today, alternatives #6 and #7.
For instance, while you may be the greatest employer, if you do not have a company website, chances are that you will appear “antiquated” and some candidates may not consider you as their top choice. Therefore, the following are areas that you may want to explore in preparation for recruiting candidates.
[Go here for 2014 data and the rest of the survey results]
2015 Merit Increases
A mere 13.8% (down from 14.1% in 2013) of survey participants have decided and/or approved their pay budgets for 2015, leaving 86.3% undecided as of the end of June.
Highlights of the survey:
- 18.2% of respondents are awarding merit increases (averaged across all employee types) of up to 2.5% in 2014 and 46.1% are awarding increases of more than 2.5%
- 21% of survey participants awarded an increase of 2.51–3% for “Meets requirements” and 12.9% awarded that amount for “Exceeds requirements.”
- The biggest challenge for respondents is “economy/revenue uncertainty.”