Pay raise plans are for top performers only, Gartner said recently when releasing results of a July survey of 130 CFOs and CEOs.
Survey highlights
- 51% of organisations favour pay raise plans for only top performing employees as an employee compensation strategy.
- Survey respondents indicated that employee performance will be a key determinant in awarding pay rises to both salaried and hourly employees as a response to cost of living increases from ongoing high levels of inflation.
- Only 28% of CEOs and CFOs polled will raise wages for all employees in response to inflation.
- 70% of those polled indicated that pay rises would only be forthcoming either to top performing employees or those located in select markets.
- A majority of respondents see permanent pay adjustments as a primary tactic for retaining talent, with 43% of respondents indicating they plan to deploy one-time bonuses to employees in addition to regular pay adjustments to retain talent.
- An additional 39% of respondents indicated they plan to fully or partially index pay adjustments to inflation.
The data shows that for now, executive leaders intend to hold the line against large-scale pay increases, and many employees expecting pay adjustments that fully compensate for cost-of-living increase may be disappointed, said Randeep Rathindran vice president, research in the Gartner Finance practice.
“It’s clear that organizations are attempting to buy more time to read the tea leaves between persistently high inflation, the threat of recession and the state of the labor market before making significant strategic shifts,” he noted.
While CEOs and CFOs are resisting across the board salary increases in the near term, additional survey data indicates that they are planning for heavier compensation investments in the future, he added.
