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2010 Average Merit Budget, Salary Structure Movement and Incentive Plans
January 8, 2010 - The Survey Group

The 2010 Compensation Planning and Practices Survey published by The Survey Group shows economic conditions continue to push organizations to lower merit budgets. The average planned merit budget for 2010 for all employees averaged 2.9%, a decline from 3.4% reported last year.

Cost Savings Measures
Nearly three-quarters (70.8%) of all survey participants have implemented or are considering implementing cost saving measures which is a substantial increase from prior years: 2009 (43.8%), 2008 (12.7%), and 2007 (10.9%). Of those companies considering implementation of cost savings measures in 2010, two of the most common actions are reduction in pay increase amount (23.8%) and elimination of annual pay increase for one year or more (20.6%).

Incentive Plans
The survey also reports short-term incentive (STI) plans continue to be prevalent at all levels in the organization. Nearly two-thirds of the participants offer short-term incentive plans. In addition, about one-third of the participants offer long-term incentive (LTI) plans, which is consistent to the previous year.

The 2010 Compensation Planning and Practices Survey contains data received from 178 New England-based companies with a total employee population of more than 388,580.

The complete survey contains comprehensive statistics for compensation planning and practices in New England such as Merit and Salary Increase Budgets, Structure Movements, Frequency of Increases, Lump Sum Payments, Base Pay Philosophy and Short- and Long-Term Variable Pay Practices.

The 2009 Compensation Planning and Practices Survey is available only to survey participants. To learn more about the survey contact The Survey Group at 781-345-7500.