Professionals have long been taught a simple formula for career success: work hard, outperform your peers, and bigger paychecks will follow. But this year, employers are planning to reward their star staffers differently; instead of factoring in merit, more companies are considering general pay hikes spread out evenly, dubbed the “peanut butter raises” trend.
“Tying merit pay increases to performance ratings has come under criticism in recent years for being too subjective and prone to bias,” the Payscale report noted. “At the same time, some organizations have made headlines by electing to standardize pay increases to alleviate administrative burden and reward workers equally, especially for low wage workers where inflation is a big concern.”
Job-seekers and staffers alike are suffering through a difficult labor market: Hiring has slowed, layoffs are steadily streaming in, and wages don’t feel like they’re holding up. Looking at the year ahead, the picture doesn’t look too pretty.
U.S. CEO John Furner said it was a way to “make managers feel like owners,” acknowledging their success with a slice of the profit pie. Their average base pay was hiked from $130,000 to $160,000, raising their total compensation to between $420,000 and $620,000 annually.
And with more than 4,000 store managers across the U.S. (and around 1.5 million workers) when the policy went into effect, the payout wasn’t just generous—it was a calculated bet on culture.
