The Lowdown on Salary Increases
Outlook for 2009
There is some good news for U.S. workers. According to a survey conducted by Watson Wyatt Worldwide
, a leading global consulting firm, companies are planning to keep pay raises steady next year.
Merit increases will average 3.5 percent in 2009, identical to the increase workers received this year and just slightly lower than the 3.6 percent average increase in 2007.
Companies also say they plan to provide larger raises to their better-performing employees. Employees whose performance ratings exceed expectations will receive an average merit increase of 4.2 percent, while those who far exceed expectations will receive an average 6 percent increase.
What It Means to You
Watson Wyatt’s survey of nearly 1,400 global companies provides an overview of employer salary increases.
Individual companies may or may not follow the norm. Still, the study suggests most employers will offer pay raises in the coming year.
Smart organizations, even those that are struggling in the current business climate, recognize it makes sense to increase employee salaries. Employers are well aware of the high cost of living, and of worker frustration with the rising cost of health care
, and other necessities.
Aiming for the Top
Of course, as always, your raise will be determined in part by your performance.
In this area you have more control than you might think. You can further your economic cause by doing a great job.
This entails more than meeting the requirements of your position. It’s about going above and beyond while engaged in your work. Ask for assignments and opportunities. At the same time, show an interest in your department, and become a team player. Similarly, focus on your overall company, and understand its goals and your role in helping to meet them.
These efforts will make you a more valuable employee. They will also provide a basis for your salary increase to be at the high end of the company spectrum.
Still, what if your salary increase isn’t what you feel you deserve, and it isn’t enough?
First, make sure you’re being honest with yourself about your achievements—and realistic about your expectations. If others in your company are receiving 3.5 percent pay raises, it’s highly unlikely you will get a 10 percent increase.
Remember, too, that salary is only one form of compensation.
Does your employer offer bonuses? What about profit sharing? Does your employer contribute to your 401(k)? Do you have a retirement plan through work? What about health insurance
Some of these benefits, such as bonuses, provide an immediate influx of cash. But all have the potential to affect your income.
The Bottom Line
In other words, make sure you don’t forget that your salary and any increase you receive is only part of your earnings picture.
And speaking of picture, don’t lose sight of the big one. This includes the fact that the average salary increase is 3.5 percent. Right or wrong, a lot of people face the same situation as you.
It’s also worth remembering that company layoffs
have been in the news. Any pay increase, even a paltry 3.5 percent, is a heck of a lot better than a 100 percent pay cut.
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