Workers Expect So-So Raises

Average raises are thought to increases by a mere 3.7% from 3.6% last year; more companies are tending to use bonuses and other types of benefits. Though the raises are mediocre, it is the second year in a row that average pay raises have increased.

This article ties into the topic covered at the Economic Roundtable luncheon today. Dr. Mark Pauly discussed how firms were to cope with increased health care premiums. One point that he stressed was that in recent studies, employees tended to favor increases in coverage rather than real wage increases. This leads me to feel that this slight increase in real wages is perfectly acceptable by most employees knowing that they will be rewarded in other forms later on; such as bonuses, increased health care coverage, increased vacation, etc... Recent data states that seventy-seven percent of organizations use "variable compensation," which is up from sixty-six percent in 2001.

What do you think? If you worked for a firm and heard that you could have a choice between higher real wage or increased health care coverage or increased vacations or a bonus, which would you choose? Is the supporting data correct in that most would prefer "variable compensation" over "more cash in pocket?"