At a time when energy costs are soaring and the U.S. economy is slumping, there is some good news for workers. U.S. companies are planning to keep pay raises steady next year, according to a forthcoming report by Watson Wyatt Worldwide, a leading global consulting firm. The survey also found that one-third of companies have not made any work force contingency plans in the event the economy continues to falter.
In its survey, Watson Wyatt found that U.S. employers are planning to give workers merit increases that will average 3.5 percent next year, 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.
"The economy is no doubt taking its toll on workers, but their 2009 merit increases appear safe - at least for now," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. "Employees will view holding merit increase budgets steady as a positive sign that will help them offset inflation and higher energy and food costs."