Towers Perrin surveyed 40 major Pittsburgh employers and found that most respondents expect to pay out merit increases at about the same level in 2002 as they did in 2001.
The study indicates participating companies overall are taking an optimistic view of the economy, says a Towers Perrin consultant.
"Merit increase budgets tend to be a pretty good barometer of a company's business outlook because wage and salary costs make up the bulk of controllable operating expenses for most businesses in today's increasingly service-based economy, " says Steve Pakela, a compensation consultant with Towers Perrin in Pittsburgh.
Some companies are being cautious, however. The 10 companies in the survey that gave smaller-than-average merit increases in 2001 plan 2002 increases of only 3 percent, about 25 percent less than last year's level in most categories.
The 10 with higher-than-average increases in 2001 are also planning smaller increases in 2002. This suggests a heightened sense of concern about the economy in the wake of the Sept. 11 terrorist attacks, according to the report.