Compensation planning insights and resources

The compensation planning cycle is the recurring process of budgeting, reviewing performance and market data, allocating pay increases or incentives, obtaining approvals, and communicating pay decisions to reward, retain, and engage employees.

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Frequently asked questions about compensation planning

What base pay increase are most organizations planning for 2026, and how does that compare to last year?

3.5% is the median base pay increase planned for 2026, which is no change from actual pay increases given in 2025.

How are organizations deciding between performance-based pay increases and across-the-board raises?

48% of organizations give pay increases based on performance, but over 40% are either using or considering across-the-board or peanut butter pay increases.

How confident are organizations that their planned pay increases are competitive?

50% of non-Payscale customer organizations say they are fairly or very confident that their pay increases are competitive, which rises to 70% for Payscale customers.