Budgets for salary increases remain historically low, but projections for 2011 show a modest increase, according to The Conference Board annual salary increase budgets survey report, released July 13, 2010. For the second straight year, the median salary increase budget in 2010 is 2.5%. Projections for 2011 show a modest increase to 3%.
There is little variation across all industry groups with no employee group in any industry projected to exceed the overall median of 3%. The projections for 2011 salary increase budgets are up from the actual 2010 increases, according to the report.
Pay for performance continues to be the common approach for the allocation of salary increase budgets as companies remain focused on high-performing employees and growth businesses. While most companies have not budgeted general increases, overall merit increase percentages for 2010 actual and 2011 projected budgets mirror the trend of those of total increases.