Making it in Massachusetts? Merit increases up slightly

Yesterday's Boston Globe reported that Massachusetts employees can look forward to merit pay raises averaging 3 to 4.5 percent this year, a slight increase over last year's raises. These figures came from a survey  of 223 employers that Associated Industries of Massachusetts conducted. (On the other hand, 13% of employers surveyed froze pay last year, and 2% put in a salary-reduction program.) According to AIM's accompanying press release, "Merit increase budgets are beginning to slowly ramp up in 2007."

Survey respondents also said that their top three compensation priorities were:

1. "Managing top performers,"
2. "Addressing market competitiveness," and
3. "Communicating the total compensation program to staff."

Quite an inspiring goal, Number 3. I'm getting chills. But ignoring the almost-Churchillian total-compensation-program-staff-communication aspiration ("I have nothing to offer but blood, sweat, and a plan to communicate the total compensation program to all the staff"), the other two goals make sense: paying our best people enough so that they don't go make more with our competitors.

I'm reminded of our April post "Bonuses: more bang for your buck," which discussed a recent Cornell School of Hotel Administration study showing that bonuses were almost ten times more effective than merit increases. Communicate that.

[And yes, I know that the Churchill quote is "blood, toil, tears, and sweat." It's kind of like "Play it again, Sam." Only not so much.]