Survey: Pay Raises to Average 3% in 2016

Pay raises for U.S. employees are expected to hold steady in 2016, according to a survey by the Towers Watson HR consulting firm. Virtually all respondents (98%) said they plan to give employees raises next year, with an average salary increase of 3% for exempt professionals.

That’s the same average percentage increase employers offered both this year and in 2014.

Executives and management employees can expect raises averaging 3.1% in 2016. The number of companies that are giving raises has risen steadily since the recession in 2008.

“To a large extent, 3% pay raises have become the new norm in corporate America. We really haven’t seen variation from this level for many years,” said Sandra McLellan, who runs Towers Watson’s rewards practice in North America.

One key finding: Employers plan to reward their best performers with significantly larger pay raises as they look for ways to retain top-performing talent in a tightening labor market.

Exempt workers who received the highest performance ratings received an average salary increase of 4.6% this year, about 77% larger than the 2.6% increase given to workers receiving an average rating. Workers with below-average performance ratings received salary increases of less than 1%.

This article was originally written by The HR Specialist for Compensation and Benefits [http://www.businessmanagementdaily.com/category/human-resources/compensation-and-benefits?affilateid=Tribune]

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