Salary fluctuations in the '90s

variable pay to increase next year

Employees shouldn't count on huge raises next year, but performance-related bonuses could pick up the slack, according to the 23rd annual Hewitt Associates Salary Increase Survey. It forecasts a steady 4.2 percent average increase for salaried employees in 2000.

But such pay hikes are overshadowed by a projected 16 percent jump in company spending on "variable compensation plans" - performance-related awards that employees earn each year but do not permanently increase their base salary.

According to the survey, 70 percent of employers offered at least one variable pay plan to their employees in 1999, up from just 47 percent in 1990.

Companies find this approach attractive because it awards top performers without permanently adding to fixed costs through salary increases, the study says.

(c) Copyright 1999. The Christian Science Publishing Society