Compensation Resources & 2006 Compensation Survey

By: Paul R. Dorf, Ph.D., APD

Upper Saddle River, N.J. - November 29, 2006 - Compensation Resources, Inc. (CRI) has released the results of its 2006 Year-End Compensation Survey. The purpose of this study was to obtain compensation to be data used for trending and planning purposes at companies of all sizes and shapes. Data was compiled from survey questions that were developed by CRI and distributed to companies in 12 industrial classifications, in addition to Not-for-Profit organizations. The survey sampled year-end compensation data from a variety of organizations, collected in October and November 2006.

Results indicated that the average merit/salary increase for all employee functional groups was 4.0% in 2006, and 4.0% is the average projected merit/salary increase for all groups in 2007. Generally speaking, Privately-Held companies reported higher percentages of actual 2006 and budgeted 2007 merit increases overall as compared to Publicly-Traded and Not-For-Profit organizations.

Highlights of this year's results, including a comparison with the prior year's findings are represented below:

MERIT/SALARY INCREASE
2005 Results2006 Results
GroupActual 2005Projected 2006Actual 2006Projected 2007
Executive4.5%5.1%4.5%4.3%
Management4.1%4.4%4.2%4.2%
Exempt Salaried4.1%4.0%4.1%3.9%
Non-Exempt Salaried3.6%3.7%3.8%3.9%
Hourly/Production3.8%3.8%3.6%3.7%
All Groups Average4.0%4.2%4.0%4.0%

Results indicated that target awards for Short-Term Incentive Plans are much higher in Publicly-Traded and Privately-Held companies than in Not-for-Profit organizations. Overall, in terms of the Compensation Package Mix, Base Salary makes up the largest percentage of the mix, followed by Annual Bonus/Incentives, and the Long-Term Incentives. The majority of the survey participants do not have a pre-established Compensation Package Mix. Stock Appreciation Rights continue to be the least commonly used Long-Term Incentive Plan.

Companies should consider the following for the 2007 compensation year:

* Determine salary budget increase,

*Determine salary structure movement; and

*Evaluate incentive plans.

It is also important to remember that the total compensation package is not just about pay, it is also about the work culture, hours, benefits, career development, and promotional opportunities, and how they balance with the employee's life outside the organization.

Human Resources
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