Leaner merit increases. (Human Resources).(Brief Article)

Industry Week, February, 2002

Expect trimmed-back merit-pay increases in 2002, says human-resources consulting firm Towers Perrin, New York. While companies' merit budgets increased by 4% or higher in 2001 for all categories of employees, a majority of respondents (59%) to a recent survey--Towers Perrin HR Cost Management Survey: A Year-End Look--said they would reduce their merit-pay budgets to increases of less than 3.5%.

"There is no question that many employers are counting on restraint in compensation to help contain costs," says Diane Gherson, leader of the firm's employee pay consulting practice.

Approximately 140 organizations from the Fortune 1000 responded to the survey.