Most white-collar workers can expect 5 percent pay raises this year and next, says a new survey of 501 companies in major industries.
The survey by the Conference Board in New York found that executive pay will go up 5.5 percent both years, slightly higher than the raises received by clerical employees and mid-level professionals.The executive figures do not include bonuses and stock options, which can bring annual increases to well over 10 percent.
Compensation specialist Charles Peck, who analyzed the survey results, conceded that raises could accelerate if the current inflation rate of 6.6 percent persists.
"I suspect that if employees start howling, pay raises could be higher next year," Peck said.
He noted that companies don't rely entirely on inflation rates to decide how much workers should be paid. "They look at things like profits and performance," he said.
Seventy-six percent of the companies in the survey said they now give extra pay for outstanding contributions and reaching specific performance targets.
"More companies are using special merit awards, incentive plans for outstanding achievement and other types of variable pay to keep salary costs under control," Peck said.
Past surveys show median pay raises for white-collar workers have been stuck at about 5 percent since 1987. The inflation rate for 1987 and 1988 was 4.4 percent.
This year's survey found the largest pay raises - 5.5 percent - will go to rank-and-file workers in the insurance industry. The smallest raises - less than 5 percent - will go to utility workers.
White-collar workers in manufacturing are expected to get 5 percent pay raises this year and 5.2 percent in 1990, the survey found.