Spend It Wisely
Raises are back and in a big way.
After years of stagnant salary growth, The PayScale Index shows that wages are growing across the economy.
If you haven't already started discussing whether or not to offer raises
yourself, we're going to make it easy for you.
Here are three potential approaches
you can take to raises in 2012-13. As you might guess, we think one is
definitely better than the others.
For those of a more cautious bent,
it might appeal to hold off and wait to make sure that
the economy really has rebounded, before offering raises of any kind. While
that approach might save a bit of money in the short term, the long term
retention costs could be more severe. Wages are up across industries,
metros and job types. So no matter where your business is located or what it does, your competitors
are probably offering raises. Your employees probably know it too.
Gets a Raise
Who gets paid? If your answer is
everyone, you need to rethink. Across the board raises are expensive and provide the wrong incentive to
top performers. You may not lose as many employees as you would with a no-raise policy, but the
ones you do lose will be the ones you can least afford to see go.
We've saved the best for last. Merit
raises, properly utilized, turn a HR budget line item into a powerful profit-driving
program. By tying merit raises to business goals, you make sure your employees
are putting their everyday efforts into fulfilling the vision of leadership.
Paying your employees for their performance, rather than their longevity or
their loyalty, gives them the incentive to build corporate competitiveness and
Realizing the benefits of merit
raises requires creating the
integrating goals into the
performance review process, and communicating your
plans to your employees.
Did you know that you can easily
automate the process of determining merit raises? To ensure that you get your
merit rate increases right use PayScale Insight’s Raise Recommender.