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Employers Still Giving Raises in Spite of Economy

In spite of the dreary economy, employers across the nation report they plan on doling out raises this year – but only to those who most deserve them. That’s the finding of a survey of nearly 2,500 employers nationwide.

U.S. employers report they are expecting to give a 2.5 percent average salary increase across all employee categories for 2010. When performance is factored in, however, the range of pay increases tells a more nuanced story.

Low performers can expect to see only a minimal increase – 0.7 percent – if anything at all. Mid-level performers can expect a nominal base pay raise of 2.4 percent. And high  performers may expect an average raise of 3.7 percent, according to the survey results, released today.

“With underfunded salary budgets this year, employers want the most bang for their buck,” said Anne C. Ruddy, CCP, president of WorldatWork, a global human resources association that conducted the survey. “They are no longer averse to withholding merit increases for poor performers so they can afford to grant meaningful increases to better performers.”

“In this economy, being an average performer just doesn’t cut it anymore,” said Alison Avalos, research manager for WorldatWork. “Companies expect performance and are willing to reward employees based on organization success, individual performance or both. Pay for performance is alive and well.”

Employers in some metro areas throughout the country reported a higher-than-average pay raise for above-average performers. Those metro areas include: San Jose, Calif., Boston, Portland, Ore., Seattle, Houston, Detroit, Washington, D.C., Atlanta, San Diego, and Tampa, Fla.