Is 3.6% for salaried employees and 3.8% for executives according to Hewitt Associates. More interestingly, and perhaps more positive, is the expected increase in variable pay, also known as pay for performance. Because employers are keeping salaries relatively flat, they will have to rely more heavily on pay for performance to retain key employees.

From the press release:

Companies are attracted to variable pay awards because they are self-funding and only pay out if certain performance criteria are met each year, and employees appreciate the opportunity to be rewarded for meeting their goals,” explained Abosch. “We’ve seen more plans incorporate individual performance measures into their plans this year, which helps employees focus on elements they can control in their jobs. To receive the maximum payout from variable pay plans, employees should make sure they understand their manager’s expectations, get as specific as possible about measuring results, and ask for performance updates throughout the year.