Businesses are re-evaluating their compensation and incentive plans in light of the brave, new economy we live in. A study by Towers Perrin found nearly half of companies are likely to reduce pay and merit increase budgets, while 39 percent are considering reducing annual incentives or bonuses. In spite of this, 66 percent say they don't think significant job cuts are likely; 46 percent say targeted job cuts may occur.
Employers are reluctant to cut reward programs altogether; 30 percent are considering cash retention programs and 41 percent are thinking about rewarding top performers with awarding top performers with targeted salary increases. Fifty-four percent of employers are concerned reducing their rewards programs will increase turnover of their best performers.
