SAN JOSE, Calif., June 11 /PRNewswire-FirstCall/ -- As a result of the economic climate, high-technology and life sciences companies anticipate shrinking or eliminating bonus payouts in addition to extending cost controls for their current fiscal year, according to new pay trends surveys by Aon Consulting's Radford, a leading provider of compensation intelligence to the high-technology and life sciences industries.
More than 70 percent of respondents to Radford's Managing Compensation in a Downturn Economy flash survey of 160 U.S. high-technology and life sciences companies expect to pay bonuses at lower levels compared to the previous fiscal year, or do not expect to pay any bonuses at all. Many companies are instead considering selective awards, such as project team bonuses or special incentives, to top performers to recognize and reward superior efforts and outcomes that rise above the challenges of today's economy.
"In times of economic turmoil, a properly designed incentive plan acts as an automatic cost stabilizer, paying out when company performance meets expectations, and not paying out when performance and financial ability is lacking," says David Knopping, vice president, Aon Consulting's Radford. "The survey results demonstrate that most incentive plans are doing exactly what they were designed to do. However, this is a difficult message to deliver to employees who are used to earning a bonus as part of their compensation package."
The Downturn survey also revealed differences between the high-technology and life sciences sectors. Only 14 percent of participating high-technology companies indicated that they would provide salary increases to eligible employees in 2009, compared to 50 percent of responding life sciences
|SOURCE Aon Corporation|
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