The typical annual wage increase is too small for employees, and the automatic pay increase for all employees is too much for many employers.

Recent articles from the Washington Post and the Society for Human Resource Management reflect a 2017 trend of companies looking to do away with the automatic annual pay increase. They cite the belief that the typical 3% increase is too small to have an economic impact for the
employee, yet it’s a significant cost increase to the employer—especially when a 3% increase happens every year. This creates an entitlement mentality for the employees and a labor cost burden for the employer.

What to do?  Replace it with…

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