Many organizations have provided no or small pay raises in 2009.  It looks like that will continue in 2010.

According to a survey conducted by the consulting firms of Watson Wyatt Worldwide and the Hay Group, the median pay raises for 2009 will be from 2-3%. Raises had been projected at 3-4%. (Half of the raises are above the median and half below.)  Additionally, the Department of Labor has reported that an average worker’s pay increased just 2.2% in the year ending on March 31^st compared with 3.2% in the previous year.

The survey found that organizations are projecting increases of 3% for 2010, which would be the smallest increase in 3 decades.  Observers have also noted a trend creating an even greater pay raise gap between the very highest performing employees and others within the organization.  The goal is to reward those individuals, who have a significant impact on organizational success, with considerably higher raises, (4-5%), while providing modest raises (2-3%) to the bulk of employees, and 0-1% for those performing below expected levels.

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