Conducted in May, BLR’s 2016-2017 Pay Budget Survey provides data from 555 participants on 2016 increase amounts for senior management, management, exempt non-management, hourly office, and hourly non-office employees, as well as the increase amounts being budgeted for next year and the most common increase amount by performance level.
2016 Merit Increases
This year’s Pay Budget Survey is practically a replay of last year’s survey with 17.9% (up from 16% last year) of employers awarding merit increases of up to 2.5% (averaged across all employee types). And, 41.8% (down slightly from 42.5% last year) are awarding increases between 2.51% and 5%. Another 4.1% (4.4% last year) are awarding increases from 5.01 to 10% of base pay, and a mere 1.6% (1.5% last year) are awarding more than 10% merit increases.
A closer look at the data, by employee type, reveals that 14.7% of employers awarded merit increases of up to 2.5% to senior management, 16.7% awarded as much to employees at the management level, and 17.6% awarded it to non-management exempt employees. 20.8% awarded the same, however, to hourly office employees, and 19.9% awarded up to 2.5% of base pay as an increase to hourly non-office employees.
At an average of 19.1% across all employee types, 2.5-3% is the most commonly awarded amount among employers awarding merit increases in 2016. Leaving the other 80% scattered all over the place.
Continuing the trend of recent years, on average, across all employee types, 30.2% (down from 31.2% in 2015, 35.7% in 2014, and 38.1% in 2013) of responding employers did not award merit increases in 2016. The breakdown on that number shows that an average of 14.2% awarded $0 and 16% selected N/A.
A peek at the maximum increase tied to a performance scale of 1-5 shows that 20% of survey participants awarded an increase of 2.51-3% for a score of 2.01-3 (meets requirements) and 11.8% awarded that amount for a score of 3.01-4 (exceeds requirements). A score of 4.01-5 (far exceeds requirements) resulted in merit increases of 4.51-5% of base pay for 13.8% of survey participants.