Conducted in May, the 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 BLR 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.

At the other end of the scale, 90.8% of survey participants did not reward employees who failed to meet the requirements of their jobs and 63.3% didn’t reward employees needing improvement. Of those who did, however, 9.8% awarded from .01-5% of base pay to employees who failed to meet requirements and 36.7% awarded increases within that same range to employees whose performance needs improvement.

2016 General Increases

General increases in 2016 are comparable to merit increases with 20.9% of employers (on average) awarding up to 2.5% and 20.5% awarding increases of 2.51-5%. Another 2.7% are awarding increases of 5.01-10% of base pay and .8% handing out raises above 10%. A general increase of2.5-3.0% is the most commonly offered amount.

The breakdown of employee types shows 18.5% of employers awarded general increases of up to 2.5% to senior management, 19.8% awarded that amount to management team members, 20.8% awarded it to non-management salaried exempt employees, 21.8% awarded the same to hourly office employees, and 23.4% awarded up to 2.5% of base pay as an increase to hourly non-office employees.

On average, across all employee types, 52% of responding employers did not offer general increases in 2016. The breakdown on that number shows that 21% awarded zero and 31% selected N/A.

2017 Merit Increases

A mere 8% of survey participants have decided and/or approved their pay budgets for 2017, leaving 92% undecided as of the end of May.

Among employers planning merit increases for 2017, the most common amount is 2.5-3% across all employee types.

Of those who have decided, on average across all employee types, 12.3% of employers expect to offer 2017 merit increases of up to 2.5% and 39.1% plan to offer merit increases of 2.5 to 5%. An average of 1.4% plan merit increases from 5% to 10% and .6% plan to go over 10%. An average of 44.6% plan no increase (12.3% plan to award 0% and 32.3% selected N/A).

The breakdown of employee types shows 9.4% of employers plan merit increases of up to 2.5% for senior management, 10.8% plan that amount for management, 12.7% plan it for non-management salaried exempt employees, 13.6% plan the same for hourly office employees, and 15% plan to award up to 2.5% of base pay as a raise for hourly non-office employees.

2017 General Increases

Of those who have decided their pay budget for 2017, on average across all employee types, 17.9% of the employers expect to award general increases of up to 2.5%, 15.9% plan to offer general increases of 2.5 to 5%, 1.1% plan to award from 5% to 10%, and .1% plan to award general increases of above 10%.

Among employers planning general increases for 2017, the most common amount is 2.51-3% for all employee groups (senior management, management, exempt non-management, and all hourly employees.) At 49.3%, roughly half don’t provide general increases and 14.4% provide them but are budgeting 0% for 2017.

The breakdown of employee types shows 16.2% of employers plan general increases of up to 2.5% to senior management, 16.7% plan that amount for management, 17.7% plan it for non-management salaried exempt employees, 18.7% plan the same for hourly office employees, and 20.2% plan to award up to 2.5% of base pay as a general increase to hourly non-office employees.

You can find a complete analysis of all the survey data, including 2016 and 2017 bonuses and variable pay, here.