Top-performing employees received 75 percent more in raises than average workers this year, according to a survey by global professional services firm Towers Watson.
In the survey of 910 companies, the majority of employers are intending to give employees a slightly bigger raise in 2014 compared to recent years. Only 4 percent of respondents said they will not raise salaries next year. Average raises are expected to near 2.9 percent next year, which is an albeit small increase to the 2.8 average raise employees gained in 2013 and in 2012.
Laura Sejen, global practice leader for rewards at Towers Watson, said factors that may result in a modest pay raise in 2014 compared to the last couple of years include a slow job market and rising health care costs. While the expected raises in 2014 are small, pay is a large determinant in recruiting.
“Still, pay remains one of the most important factors when an employee considers joining or remaining with a company, so employers need to be cognizant that they potentially risk losing employees if their compensation programs aren’t in sync with competitive market practice,” Sejen said in a statement.
Performance and compensation management is critical to maintain the level of productivity companies need to be successful, USA Today reported.
To keep their most talented employees, companies raised their average salary by 4.6 percent this year. Compared to these top performers, workers who performed below average received only a 1.3 percent increase. Sejen said one of the problems employers have is determining compensation for employees depending on their level of performance.
While this may be the case for many companies, a solution would be to use incentive compensation software to develop a reward strategy that helps keep the best workers motivated to stay.
