Last year the consumer price index increase was 1.6%. It is scheduled to be closer to 2% in 2014. Therefore if an employee wants to get ahead in life they need to get a raise of at least 2%
According to a survey by Towers Watson Data Services employers are planning to increase wages an average of 2.9% in 2014. These increases won’t be distributed evenly. Those employees considered to be top performers or in top demand will receive the lions share.
Employers can make a big mistake by looking at their historical compensation patterns. Perhaps the most important question to ask is “what would you have to pay to hire that employee today?” It is the marketplace, not your compensation scheme, which defines a fair day’s pay.
Before anyone gets a raise they should be asked to explain how they’ve added more value to the company. One reason we designed the form Why I Deserve a Raise. When you think about it, a raise should be given any time an employee has added new value and you’ve got the cash flow to afford it. Waiting around for an annual comp discussion is yesterday’s thinking.
