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Merit pay increases for employees in Asia-Pacific and Latin America will continue to top those of U.S. and European workers, according to a soon-to-be-published report by Watson Wyatt Worldwide, a leading global consulting firm, and WorldatWork, the association for human resource professionals.<br /><br />The global survey of 946 companies found that while employees worldwide can expect to see about the same levels of merit pay they are receiving in 2007, employees in quickly developing regions will receive a higher percentage. Merit-based pay is expected to increase 5 percent in Asia-Pacific, 4.5 percent in Latin America, 3.6 percent in the United States and 3 percent in Europe next year, for a global median of 4 percent. <br /><br />"With such a competitive global market for talent, it's hard to foresee downward pressure on pay levels coming anytime soon, said Laura Sejen, Watson Wyatt global director of Strategic Rewards. "The challenge to attract and retain skilled workers remains especially acute in Asia-Pacific and Latin America, where rapid economic growth, high turnover and the expectation of frequent promotion keep pushing up compensation.<br /><br />Reflecting tight labor markets, employers are setting aside separate money for market adjustments. Employers in Asia-Pacific are budgeting the most for market adjustments at 3 percent, while employers in Latin America are setting aside 2 percent. In Europe, market adjustment budgets of 2 percent are anticipated, and in the United States, budgets will remain at less than 1 percent  a projected 0.7 percent in 2008.<br /><br />However, throughout the world, companies are focusing more on rewarding high performers with bonuses than on increasing base pay through merit increases or market adjustments. Employers around the world are increasing the number of workers eligible for variable incentives, but at the same time, goals are getting harder to reach. More than half (51 percent) of companies anticipate raising their financial targets in the coming year.<br /><br />Twenty-four percent of employers in Asia-Pacific, 18 percent in Latin America and 17 percent in Europe report increasing eligibility for employees for short-term incentives. In the United States, 10 percent report increasing eligibility.<br /><br />"Pay is just one part of the total rewards package, said Don B. Lindner, global rewards practice leader at WorldatWork. "To attract and retain top performers, companies need to move toward a holistic, total rewards approach to managing compensation, benefits, work-life and career development programs.<br /><br />The full report will be published in October.<br /><br /><br /><hr width="100%" size="2" /><br /><font size="1">About Watson Wyatt Worldwide<br />Watson Wyatt (NYSE: WW) is the trusted business partner to the world's leading organizations on people and financial issues. The firm's global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,000 associates in 31 countries and is located on the Web at www.watsonwyatt.com.<br /><br />About WorldatWork<br />WorldatWork (www.worldatwork.org) is an international association of human resource professionals and business leaders focused on attracting, motivating and retaining employees. Founded in 1955, WorldatWork provides practitioners with knowledge leadership to effectively design and implement strategies and practices in total rewards  compensation, benefits, work-life, performance and recognition, development and career opportunities. WorldatWork supports its 30,000 members and customers in 75 countries with thought leadership, education, publications, research and certification. </font>