Executives Can Expect Smaller Merit Increases - Brief Article

HR Magazine, Jan, 2000 by Robert W. Thompson

In 2000, executives can look forward to larger merit pay increases than nonexempt and other exempt employees will get, but executives' pay will increase more slowly than that of the other employee categories. Buck Consultants' 10th annual Compensation Budget Survey found that executives can expect merit raises of 4.3 percent-down from 4.5 percent awarded in 1999.

Increases for other exempt employees will average 4.1 percent for the fourth consecutive year. Merit raises for nonexempt salaried and nonexempt hourly workers will average 4.0 percent and 3.9 percent, respectively-the same as in 1999.

Of the 341 Fortune 500 companies participating in the survey by the New York-based firm, many continue to use alternative reward strategies and annual bonus programs for employees below the senior and middle management levels. More than 90 percent of the surveyed employers reported using or implementing at least one alternative reward strategy.

Buck Consultants found that more than 75 percent of the respondents are using hiring bonuses, with another 6 percent either considering or implementing this strategy. Also, 45 percent of the respondents are using retention bonuses, with another 14.5 percent implementing or considering use of retention bonuses.

Copies of the "1999/2000 Compensation Budget Survey of Fortune 1000 Companies" are available for $125 each by contacting Buck's National Survey Center at 500 Plaza Drive, Secaucus, NJ 070961533;