2014: The Year of the Pay Raise?
Top-rated workers with skills that are in demand will fare best.
In recent years, the “pay raise” has been synonymous with the “tooth fairy” and “Santa Claus” − non-existent. During the depths of the recent recession, up to 75% of companies were freezing wages. But according to Aon Hewitt research, salary increases in 2014 − while expected to remain modest − are predicted to reach their highest levels in six years. And top performers may see a bit more pay in their paycheck than the average worker.
According to a recent Towers Watson survey, those considered office stars received increases of 4.6% in 2013 − well above the 2.6% pay hike granted to workers rated average and way more than the 1.3% received by those rated below average. Similar trends can be expected in 2014. Plus, bosses are expected to dole out bigger bonuses to valued employees, particularly for employees with specialized skills, as an incentive to retain critical talent.
So, you think you are 4% bonus worthy? A survey by compensation expert Buck Consultants found that in 2013, fewer employees were rated in the top two tiers on a five-tier scale than in 2012. “The way to get a better performance rating is to make sure you have clarity with your manager about priorities for the year,” says Marcie Mueller, Talent Development Practice Leader at IMPACT Group. “Get feedback throughout the year so that you can make mid-course corrections to ensure your goals are met.”
“Demonstrating strong leadership skills creates a high-involvement work environment where employees feel valued, needed and recognized,” said Mueller. “Good managers provide good feedback. But, not all managers are good communicators. Leadership skills are essentials to foster an environment which supports high employee engagement and increased employee retention.”
But pay increases, bonuses and fancy perks alone won’t keep them put. It sounds cliché, but what the best people really want is to feel like they make an impact.
Maybe that means giving your people more customer contact or cut the red tape to make their vision come to pass. If you enable their vision, success and monetary gain may gladly follow, but the mere fact that you allowed them the freedom to execute will be worth as much as a big raise. When an employee feels that their organization is interested in their future, they often feel more valued, and in turn produce better results for the organization. Putting your top performers on a career development track shows that leadership is invested.
Great performers usually have been achievers all their lives. They didn’t get a paycheck in grade school or a bonus for keeping up with chores at home. They relied on old-fashioned gratitude and purpose fulfillment. So while your top performers may still expect a bigger paycheck for their efforts in 2014, don’t forget to recognize their success in other ways!