American employers are increasingly relying on performance-related pay awards that must be re-earned every year to attract and motivate their workers.
With wage rises during a period of economic expansion failing to keep pace with inflation for the first time since World War II, most American workers are keenly aware that rising energy, medical and interest rate costs have cancelled out any pay rises they may have earned this year.
But a survey of 1,028 large employers by Hewitt Associates has found that bonuses and performance-related pay deals are increasingly filling this gap.
The findings echo a study by Mercer Human Resource Consulting in July that suggested U.S firms were relying more on incentives such as year-end bonuses to retain employees without boosting fixed costs.
The Hewitt study found that base salaries were increasing by around 3.7 per cent next year, the highest increase in five years but only a modest increase from this year's 3.6 per cent.
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