All in Compensation Planning

Triennial merit pay increases are the latest trend in compensation. This exciting new approach to base pay is something to consider before your next round of raises. Once every three years.

I have listed five reasons to consider triennial increases and am sure you can add to this list. I am also sure that naysayers will point out potential problems, but we optimists can chat about those some other time.

As compensation professionals, it is our responsibility to educate people about our tools. Perhaps we have been a bit complacent over the past decade. The people who represent us, our companies, and our employees have an obligation to know what makes us successful. Those of you who have tried to teach yourself about equity compensation may have found it was not an easy task. Imagine if you were a politician and this was item 133 on your priority list!

Executive compensation is always in the spotlight. With all of that attention, mostly focused on supposed failures, you’d think that we would have seen some fairly dramatic changes over the past decade. The truth is, even with lots of new regulations, some fairly visible failures in governance and annual increases that surpass the rank and file every year, executive pay has stayed fairly consistent.

We have been living in an age of 3% annual increases for several years.  Sometimes it’s a bit more; sometimes it’s a bit less. On average, it’s not too inspiring. We do our best to give a bit more to our best performers, but those in the middle must fend for themselves. It’s not hard for them to find a time machine.