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.
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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.