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H E A LT H W E A LT H C A R E E R
2016
GLOBAL COMPENSATION PLANNING REPORTJULY EDITION
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© 2016 Mercer LLC. 2 Global Compensation Planning Report — July Update
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Condition of SaleCopyright © 2016. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or be transmitted in any form or by any means, electronic or mechanical, photocopying, recording or otherwise, without the prior written permission of the publishers. No responsibility for loss occurring to any person acting or refraining from acting as a result of the material in this publication can be accepted by the authors or the publishers.
PUBLICATIONS DIRECTORSamantha Polovina
CREATIVE DIRECTORStefani Baldwin
PRODUCT MANAGERChrisy Wilson
PRODUCTION MANAGERSumit Bajaj
PROJECT MANAGERRahi Sardana
ANALYSTSAnkur BoraAshvinder KaurDeepak GaurDivya MSunil KaushalVishal Singla
WRITERSAashi Choudhary
COPYEDITORSAnkita Rawat Divya Prakash
DESIGNERSRahul KhannawaliaRuma RoyVishal Kapoor
PUBLISHED BY: MERCER1166 Avenue of the Americas, New York, New York 10036, United States
© 2016 Mercer LLC.
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DATA MINING & INSIGHTSIn today’s competitive race to attract and retain highly skilled global talent, organisations require current, in-depth information on everything from local statutory benefits, to salary trends, to managing a diverse workforce. Through Mercer’s own extensive global presence, we collect and analyse data and insights that help companies take the actions necessary to support their human capital strategies. You can order any of the publications below by clicking on the title links or by visiting www.imercer.com/global.
Compensation Handbook
Global Car Policies
Global Compensation
Planning Report
Global Diversity and Inclusions
Handbook
Global Pay Summary
HR Atlas Asia Pacific
HR Management Terms
2016
AMERICASSHORT-TERM INCENTIVES AROUND THE WORLD
H E A LT H W E A LT H C A R E E R
Short-Term Incentives around
the World
International Geographic Salary
Differentials
Total Employment Costs around
the World
Worldwide Benefit & Employment
Guidelines
H E A LT H W E A LT H C A R E E R
I N T E R N A T I O N A L L I V I N G W A G E R E P O R T 2015
International Living Wage
Report
Talent All Access Portal
Subscription Services
Global Mobility Handbook
2016GLOBAL CAR POLICIES
H E A LT H W E A LT H C A R E E R
Severance Policies —
Asia Pacific
Global Parental Leave
HR Guide To Doing Business
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© 2016 Mercer LLC. 4 Global Compensation Planning Report — July Update
TABLE OF CONTENTS
CORRESPONDENCE 2
DATA MINING & INSIGHTS 3
TABLE OF CONTENTS 4
INTRODUCTION 7
COMPENSATION STRATEGY 9
SUMMARY OF KEY FINDINGS 17
ECONOMIC TRENDS 46
SALARY INCREASE TRENDS 55
AFRICA 96
Algeria 97
Angola 100
Botswana 103
Cameroon 106
Côte d'Ivoire 109
Democratic Republic of Congo 112
Egypt 115
Ethiopia 118
Gabon 121
Ghana 124
Guinea 127
Kenya 130
Libya 133
Malawi 136
Mauritius 139
Morocco 142
Mozambique 145
Namibia 148
Nigeria 151
Rwanda 154
Senegal 157
South Africa 160
Tanzania 163
Tunisia 166
Uganda 169
Zambia 172
Zimbabwe 175
AMERICAS 178
Argentina 179
Bolivia 182
Brazil 185
Canada 188
Chile 191
Colombia 194
Costa Rica 197
Dominican Republic 200
Ecuador 203
El Salvador 206
Guatemala 209
Honduras 212
Mexico 215
Mexico–Bajio 218
Mexico–Monterrey-Saltillo 221
Mexico–Reynosa 224
Nicaragua 227
Panama 230
Paraguay 233
Peru 236
Puerto Rico 239
Trinidad and Tobago 242
United States 245
Uruguay 248
Venezuela 251
ASIA PACIFIC 254
Australia 255
Bangladesh 258
Cambodia 261
China–Beijing 264
China–Changsha 267
China–Changzhou 270
China–Chengdu 273
China–Chongqing 276
China–Dalian 279
China–Guangdong 282
China–Hangzhou–Ningbo 285
China–Hefei/Wuhu 288
China–Nanjing 291
China–Qingdao 294
China–Shanghai 297
China–Shenyang–Changchun 300
China–Suzhou 303
China–Tianjin 306
China–Wuhan 309
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China–Wuxi–Changzhou 312
China–Xiamen–Fuzhou 315
China–Xian 318
Hong Kong 321
India 324
Indonesia 327
Japan 330
Malaysia 333
Myanmar 336
New Zealand 339
Pakistan 342
Philippines 345
Singapore 348
South Korea 351
Sri Lanka 354
Taiwan 357
Thailand 360
Vietnam 363
CENTRAL AND EASTERN EUROPE 366
Albania 367
Armenia 370
Azerbaijan 373
Belarus 376
Bosnia and Herzegovina 379
Bulgaria 382
Croatia 385
Czech Republic 388
Estonia 391
Georgia 394
Hungary 397
Kazakhstan 400
Latvia 403
Lithuania 406
Macedonia 409
Moldova 412
Montenegro 415
Poland 418
Romania 421
Russia 424
Serbia 427
Slovakia 430
Slovenia 433
Turkey 436
Ukraine 439
Uzbekistan 442
MIDDLE EAST 445Bahrain 446
Iraq 449
Israel 452
Jordan 455
Kuwait 458
Lebanon 461
Oman 464
Qatar 467
Saudi Arabia 470
United Arab Emirates 473
Yemen 476
WESTERN EUROPE 479Austria 480
Belgium 483
Cyprus 486
Denmark 490
Finland 493
France 496
Germany 499
Greece 502
Ireland 505
Italy 508
Luxembourg 511
Malta 514
Netherlands 517
Norway 520
Portugal 523
Spain 526
Sweden 529
Switzerland 532
United Kingdom 535
TABLE OF CONTENTS
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ABOUT THIS REPORT 538METHODOLOGY 539
GLOSSARY 543
ABOUT MERCER 545
TABLE OF CONTENTS
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INTRODUCTIONMercer’s 2016 Global Compensation Planning Report — July edition includes analyses of economic trends and salary increase data by local Mercer consultants and experts. The report focuses on salary increases and economic trends, but also includes information on short-term incentives, attracting and retaining employees.
To provide a more nuanced view of planned salary increases, the data show salary increases both with and without companies that reported salary freezes (including and excluding zeroes).
REPORT STRUCTUREThe report has seven main sections:
• The Introduction section provides the report structure and a brief note on the topics covered in the report.
• The Compensation Strategy section provides recommended guidelines and considerations for effective compensation programmes.
• The Summary of key findings provides an overview on economic trends, salary increases, short-term incentives, mandatory salary increase schemes, and talent forecasts.
• The Economic trends section summarises economic measures, by percentage, for all countries represented in the report.
• The Salary increase trends section summarises compensation trends, by percentage, for all countries represented in the report. Data are presented both excluding and including zeroes.
• The individual country pages provide important insights into the economic climate of each country, as well as actions being taken and considered by employers around the world.
— Economic trends: This section shows the gross domestic product annual average change (%), inflation annual average change (%), and unemployment (%) for the three years covered.
— Base salary increases: Mercer collects data on salary increases through detailed surveys of representative companies with operations in the countries analysed in the report. This figure includes merit increases, across-the-board increases, and any mandatory increase granted for inflation (cost-of-living adjustment). This section includes a table showing the percentage of companies reporting zero salary increases, and salary increases for six employee levels (plus “all employees”) excluding zeroes and including zeroes. All salary increase figures represent median values, except the figures denoted with an asterisk that represent average values, in case of small survey samples.
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INTRODUCTION
— Mandatory salary increase schemes: This section describes any mandatory salary increase schemes that might apply in the country.
— Short-term incentives: Variable bonus: This section shows variable bonus by employee level.
— Attracting and retaining employees: This section lists the employees hardest to attract and the employees hardest to retain.
• The About this report section includes the report methodology and a glossary of terms and definitions.
EMPLOYEE LEVELSGCPR offers most of its compensation information across employee levels. The following are represented in this report:
• All employees
• Executive
• Management
• Professional sales
• Professional nonsales
• Para-professional white collar
• Para-professional blue collar
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COMPENSATION STRATEGYCompensation is the single biggest expense for most companies in today’s knowledge-driven economy. Successful compensation programmes require efficient and effective planning and budgeting processes. In turn, these processes need well-defined and properly managed systems to support their operations. With an overall compensation management strategy as a framework, human resources (HR) can ensure that all these systems work harmoniously.
Effective planning and budgeting allows a company to achieve the following:
• Attract qualified talent. The programme must be adequate and competitive to interest the best talent available in the market.
• Retain skilled employees. A well-designed programme ensures that pay remains adequate in changing market conditions to retain talent.
• Motivate employees. A performance-driven compensation strategy keeps employees motivated and engaged.
• Create value. The programme creates value through a good return on investment, along with an increase in company profits, market share, and shareholder returns.
HR should not consider the planning process as a one-time activity, but — at least — as an annual process, supported by appropriate systems within the parameters of pay strategy. And throughout the process, HR should perform constant monitoring of both internal pay equity and external competitiveness.
BASE SALARYBase salary is compensation for the “job” an employee performs — that is, the individual’s actual competencies, responsibilities, or accountabilities — and considers the level of responsibility (for people or tasks), tenure with the company, and work experience. As base salary represents a fixed amount of total cash compensation (base salary plus bonus) for the employee, it also represents an ongoing liability for the organisation.
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Although every company has a distinct system of employee compensation, in general, one can broadly divide remuneration into five major components.
1. Annual base salary = Monthly base salary x number of months paid.
2. Annual guaranteed cash = Annual base salary + guaranteed allowances and legally required cash payments.
3. Annual total cash = Annual guaranteed cash + variable pay (short-term incentives, bonuses, commission).
4. Annual total cash + long-term incentives = Annual guaranteed cash + variable pay (short-term incentives, bonuses, commission) + long-term incentives (stock options, restricted stock, performance shares).
5. Annual total remuneration = Annual total cash + long-term incentives + benefits.
INTERNAL FACTORS INFLUENCING A COMPENSATION STRATEGYBeyond the job market, internal company-related factors also have an impact on remuneration. For example, such factors could include the firm’s overall (and divisional) business strategy, as well as its ownership, structure, and financial constraints.
The existing pay programme, and what incumbents expect from it, also plays a part. If internal equity — which measures how a company values its jobs in relation to one another and whether people are paid according to their contributions — is not equitable, the result may be employees who are demotivated.
The salary system should also reflect how management views the work that employees do. It should send the right message; for example, pay ranges that are narrow and have more grades allow for more frequent promotions and lead to a feeling of growth and progress for employees.
COMPENSATION STRATEGY
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In addition, the pay plan should offer easy administration: Be simple to follow, maintain, and administer to ensure reasonably associated costs that use resources optimally and do not go beyond what the company can afford. Supporting the administrative process are other considerations:
• Is the policy centralised or decentralised? A centralised corporate policy tends to be rigid and similar across the company; on the other hand, a decentralised policy may give more flexibility or variability to different departments, depending on prevailing market rates.
• Is the plan’s objective(s) short-term or long-term? The answer depends on the company’s growth phase; a long-term orientation can result in a well-developed structure, whereas short-term orientation may better address volatility in talent availability.
EXTERNAL FACTORS INFLUENCING A COMPENSATION STRATEGYMarket pricing determines competitive pay levels for specific jobs in a defined market. This approach helps HR assess the competitiveness of the company’s pay levels relative to others competing for the same skilled talent. It also provides a foundation for ensuring fair pay and developing appropriate salary structures. Conducted properly, market pricing enhances the company’s success by supporting its business strategy with a competitively paid and motivated workforce.
Market pricing involves “benchmarking” the company’s pay and benefits against the market, followed by analysis of the results. The analysis:
• Categorises employees on the basis of their role within the company. Most large companies group employees by function, such as administration, finance and accounting, HR, information technology, operations, sales and marketing, and others.
• Converts the data into a workable approach that ensures its continuous ability to attract and retain employees. Each company requires its own approach to develop compensation administration programmes that are compatible with its culture and objectives. The company should also recognise and reward behaviours and skills that facilitate its success. Failure to identify appropriate competitive compensation can lead to costly turnover and loss of critical skills and intellectual capital, as well as failure to meet objectives.
Industry trends also influence employees’ expectations of what they should receive, while tax treatment, company rules, and accounting standards can all impact the pay strategy. Responsiveness to the external economic environment is also important, such as demand and supply of various skills, as well as general market conditions (economic growth, unemployment, inflation, and so on). The company must respond to prevailing political, social, and legal environments, which can affect compensation — pay must conform to legal minimum wages and adhere to country-specific laws that mandate fair compensation.
COMPENSATION STRATEGY
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STEPS IN DEVELOPING AN EFFECTIVE PROGRAMMEDeveloping an effective rewards programme to meet HR’s accountabilities requires a number of essential steps:
• Assess the current programme through multiple perspectives (cost, employer, employee, market) and inventory all plans.
• Set the rewards philosophy and strategy to drive desired outcomes and business results.
• Design the programme with new components, adjustments to existing plans, and defined success and measurement processes.
• Implement the programme with a communication strategy to engage and inform employees and managers.
• Administer the programme through in-house staff and/or outsourcing, with an eye to enhancing the employee’s experience and managing costs.
COMPENSATION STRATEGY
SALARY ADMINISTRATIONOnce competitive compensation levels are identified, HR converts the data into a workable approach that ensures its continuous ability to attract and retain employees. Each company requires its own approach to develop compensation administration programmes that are compatible with its culture and objectives. It is important to align business strategy with human capital strategy, which then aligns to specific rewards programmes. In designing these rewards programmes, companies can use data from external sources to understand the competition and design attractive, cost-effective pay plans.
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COMPENSATION PLANNING PROCESS
1 2 3 4 5 6 7 8 9 10 11 12
1 Update Project Planning2 Data Collection3 Setting Measurement Standards4 Internal Equity Measurement5 External Competitiveness Measurement6 Pay/Performance Measurement7 Business Alignment Measurement8 Capabilities measurement9 Formulate Recommendations
10 Management Approval11 Implementation
STEP
MONTHS
Source: Mercer’s 2014–2015 Compensation Handbook.
COMPENSATION STRATEGY
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SALARY MANAGEMENT AND REVIEW PROCESSPoor compensation management and review may lead to costly “market premiums” that can inadvertently lead to average (or poor) performance, or dangerous “market discounts” resulting in unwanted turnover. It may also lead to misalignment of business goals with performance goals, and higher fixed costs by not tying pay to performance.
Proper salary management establishes a meaningful and acceptable relationship between work and rewards. Employees’ work should help companies achieve their desired goals and results. These goals derive from the company’s overall business strategy, which supports the company’s mission and vision. If the process is designed and administered properly, a company’s compensation programme becomes an efficient, effective management tool for supporting the company’s overall business strategy.
But, designing an effective compensation programs is not a one-time affair. It involves constant review and refinement to keep up with changing business needs wherever the company operates. The salary review process sets an overall pay budget and determines individual salary increases within that budget, typically every year. The process involves a number of key — sometimes overlapping — phases:
• Planning a budget based on available or forecasted resources.
• Determining individual salary increases within the overall budget (considering corporate performance in the market and individual performance).
• Communicating the outcome of the exercise to employees.
A salary review process starts with obtaining relevant data and reviewing whether a pay change is warranted. The budget is fixed, based on both actual availability of cash and forecast of growth and profits in the short-term.
HR should understand the degree to which the business can vary compensation budgets if market conditions change. Establishing a close working relationship early with the finance function ensures that key financial metrics are correctly stated and eventual proposals will fall within the budgets set in the corporate business plan.
HR should gather and assess performance data internally. Key measures should include quantitative measures, such as profit levels, and qualitative measures, such as customer satisfaction and product quality. Companies also should consider corporate governance and business ethics issues, as well as how results are achieved and absolute vs. targeted performance.
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Source: Mercer’s 2014–2015 Compensation Handbook.
Whether a company has a relatively new or well-designed and tested salary programme, the company would do well to periodically audit the overall process and policies. An audit can help avoid potential legal and financial exposure by ensuring compliance with government regulations. The organisation should also monitor pay packages to avoid overpaying employees, creating inequitable situations, and maintaining a policy that no longer makes sense.
COMPENSATION STRATEGY
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Source: Mercer’s Total Remuneration Surveys, 2015.
Organisation performance Length of service Individual performance Inflation
Job level Position in salary range Market position/competitiveness
FACTORS DETERMINING INDIVIDUAL SALARY INCREASES
Some compensation programmes consider a combination of factors when determining individual increases, such as individual employee performance and external market rates for comparable employees. A matrix combining factors such as ratings of employee performance and reference points extracted from external salary survey data help to determine individual salary increases.
The distribution often also takes into account employees’ current salary position relative to the market or target pay rates; those below market receive proportionately more (assuming their performance reaches the required level). Whatever criterion is used to determine salary increases, there should be a system of required authorisations before any change is made.
SUMMARYEmployers today acknowledge the increasingly important role of reward programmes to achieve their business goals through delivering the right amount of rewards, to the right people, at the right time, for the right reason. Companies have a broader comprehension of the “rewards” concept due to better understanding of their human capital strategy — the “people” side of business strategy. They recognise the importance of selection, development, deployment, motivation, management, and retention of people to carry out the business strategy.
When properly designed and executed, a total rewards strategy — typically, the largest single expense — can be a powerful driver of business success. But, when designed and implemented badly, one of two outcomes is likely. At best, the company does not realise the optimal return from its investment in a total rewards package; at worst, the programme elements clash directly with each other, potentially undermining the success of the overall business strategy.
That said, the company’s performance expectations must be clear — for instance, through use of examples of problematic employee behaviour; timely and continuous feedback; and expectations that are specific, measurable, time-bound, and realistic — to help employees understand what is expected and how these factors affect their compensation.
COMPENSATION STRATEGY
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COUNTRY SAMPLES
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COUNTRY SAMPLEECONOMIC TRENDS
GDP, INFLATION, AND UNEMPLOYMENT
GDP, annual average change Inflation, annual average change Unemployment
2015: 2.7% 2016: 3.2%
2017: 3.6%
2015: 0.2% 2016: 0.5%
2017: 1.5%
2015: 9.9% 2016: 10.0%
2017: 9.5%
BASE PAY INCREASES
MEDIAN SALARY INCREASES EXCLUDING ZEROES MEDIAN SALARY INCREASES INCLUDING ZEROES
2015 2016 2017 2015 2016 2017
All employees 2.9% 3.0% 3.0% 2.9% 3.0% 3.0%
Executive 2.9% 3.0% 3.0% 2.9% 3.0% 3.0%
Management nonsales 2.9% 3.0% 3.0% 2.9% 3.0% 3.0%
Professional sales 2.8% 3.0% 3.0% 2.8% 3.0% 3.0%
Professional nonsales 2.9% 3.0% 3.0% 2.8% 3.0% 3.0%
Para-professional white collar 2.8% 3.0% 3.0% 2.8% 3.0% 3.0%
Para-professional blue collar 2.8% 3.0% 3.0% 2.8% 3.0% 3.0%
SALARY INCREASES
Data for 2015 Actual
Data for 2016 Actual
Data for 2017 Forecast
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2015 2016 2017
All employees 2% 6% 3%
Executive 3% 13% 10%
Management nonsales 3% 12% 10%
Professional sales 3% 12% 7%
Professional nonsales 3% 10% 10%
Para-professional white collar 3% 12% 10%
Para-professional blue collar 3% 11% 8%
SHORT-TERM INCENTIVES
COMPANIES REPORTING ZERO SALARY INCREASES
EXECUTIVEMANAGEMENT PROFESSIONAL PARA-PROFESSIONAL
NONSALES SALES NONSALES WHITE COLLAR BLUE COLLAR
Respondents with bonus programme 95% 96% 85% 90% 82% 85%
Median target bonus (% of base pay) 18% 15% 16% 10% 10% 12%
Median maximum bonus (% of base pay) 23% 20% 21% 17% 15% 16%
VARIABLE BONUS BY EMPLOYEE LEVEL
COUNTRY SAMPLE Data for 2015 Actual
Data for 2016 Actual
Data for 2017 Forecast
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MANDATORY PAY INCREASE SCHEMESThere is no mandatory pay increase policy.
© 2016 Mercer LLC. 405 Global Compensation Planning Report — July Update
ATTRACTING AND RETAINING EMPLOYEES
SOURCES
WHICH EMPLOYEES ARE HARDEST TO ATTRACT?
JOB FAMILY LEVEL
Engineering All levels
Information Technology Professional
Sales Professional, all levels
WHICH EMPLOYEES ARE HARDEST TO RETAIN?
JOB FAMILY LEVEL
Engineering All levels
Information Technology Professional
Sales Professional, all levels
SOURCE TOTAL NUMBER OF PARTICIPANTS DATA EFFECTIVE DATE
Salary Movement Snapshot, September 2015 41 August 2015
Latvia Total Remuneration Survey, May 2015 180 May 1, 2015
Salary Movement Snapshot, June 2016 51 May 2016
International Monetary Fund, World Economic Outlook Database, April 2016 Not applicable April 2016
Organisation for Economic Co-operation and Development Dataset: Economic Outlook No 99, June 2016
Not applicable June 2016
Data for 2015 Actual
Data for 2016 Actual
Data for 2017 Forecast
COUNTRY SAMPLE
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ABOUT THIS REPORTS
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METHODOLOGYGCPR’s methodology primarily relies on proprietary Mercer data combined with a comprehensive review and update process. The report allows HR practitioners to easily understand the economic climate and market trends in the locations in which they have employees.
The salary increase data in the report provide insights in to pay trends for budgeting and pay budget forecasts. These data are available for a period of three years overall, as well as for six specific career levels by country.
The GCPR July 2016 report covers the salary increase information for the previous year (2015), the current year (2016), as well as the forecast for the upcoming year (2017). The catagorisation of career levels is all employees, executive, management nonsales, professional sales, professional nonsales, para-professional white collar, and para-professional blue collar.
The July edition primarily includes updated information, where available, for:
• Economic trends
• Base salary increase
SALARY INCREASE DATASalary increase trends for the different employee levels appear as median pay increases, both excluding and including zeros:
EXCLUDING VS. INCLUDING ZEROES
• Excluding zeros represents pay increases of companies that actually do increase pay (excluding pay freezes).
• Including zeros shows the increases of all companies, including those with pay freezes.
The information on the percentage of companies reporting zero salary increases is included to help identify and/or understand any salary freeze trends.
SOURCES
Salary figures and forecasts are based on Mercer’s Total Remuneration Surveys (TRS), Salary Movement Snapshot (SMS) surveys, and
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country compensation databases. The primary Mercer regional sources include the Latin America Economic Trends Report and the US and Canada Compensation Planning Surveys, among others.
UNAVAILABLE DATA
If salary increase data are not available for a given employee level, the report denotes that fact with an en-dash (“–”).
For GCPR July 2016, there were several countries where salary forecast data for 2017 were not available as the Mercer compensation surveys for these countries are yet to be completed. The forecasts for these countries will be available in our October 2016 edition and will be updated in our GCPR-Online edition as the data become available.
The following countries do not have 2017 salary increase forecast data (both excluding and including zeros) in the July 2016 edition:
SALARY INCREASE TRENDS The Salary Increase Trends section in the report includes consolidated data on salary increases, excluding and including zeros, to help with country comparisons.
Information, where available, on mandatory pay increase schemes is also available in the report.
ECONOMIC TRENDS The Economic Trends section provides information on three key economic indicators: Gross Domestic Product (GDP), Inflation and Unemployment. These consolidated data from the three economic indicators, reported over a three-year period, helps with country comparisons.
METHODOLOGY
AFRICA AMERICAS ASIA PACIFIC CENTRAL AND EASTERN EUROPE WESTERN EUROPE
Libya Argentina Australia Albania MaltaNamibia Bolivia Bangladesh MacedoniaRwanda Costa Rica Cambodia Montenegro
Mexico-Reynosa China citiesNicaragua New ZealandParaguayUruguay
Venezuela
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METHODOLOGY
Economic information was drawn from: the International Monetary Fund (IMF) World Economic Outlook database; the Latin America Economic Trends Report, national central banks; national statistical offices; the International Labour Organisation; Key Indicators of the Labour Market (KILM); the Organisation for Economic Co-operation and Development Dataset: Economic Outlook; and the European Commission and government sources.
SHORT-TERM INCENTIVE DATAFor designing a competitive salary and reward programme, short-term incentives play a significant role. The information provided on variable pay by employee level indicates the prevalence of these programmes, as well as target and actual or maximum bonus levels for different countries.
Amounts are provided as a percentage of base salary unless otherwise noted. Generally, targets and maximum amounts are valid for the current performance cycle. The performance cycle may differ for each company and may be based on a calendar year, the company's financial year, or another time-frame. The actual bonus amount typically represents the award paid for the previous bonus cycle.
DATA SOURCES Total Remuneration Survey, 2015
Salary Movement Snapshot Survey, June 2016
Latin Americas Economic Trends Report, July 2016
Asia Pulse Survey, July 2016
Cyprus –
• Survey of Economic Confidence by the University of Cyprus, June 2016
• Statistics Service, http://www.mof.gov.cy and www.cystat.gov.cy
• Consultant estimates
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Malta –
• The MISCO Salaries and Benefits Report, 2015/2016
• MISCO Consulting Limited, April 2016
• Budget Speech, October 2015
Compensation Planning — Preliminary Report, June 2016.
Consumer Goods Industry Forum (APCBF), Asia Pacific, 2015
International Monetary Fund (IMF) World Economic Outlook Database, April 2016
International Labour Organisation, Key Indicators of the Labour Market (KILM), November 2015
Organisation for Economic Co-operation and Development Dataset: Economic Outlook No 99, June 2016
European Commission — Spring Forecast, May 2016
UPDATE PROCESSGCPR combines regional and local salary increase survey data to offer a global planning tool for Mercer’s clients. The basis for salary increase figures includes country survey data (TRS and SMS) and regional sources (such as the Latin America Economic Trends Report), which are locally and/or regionally peer reviewed, then integrated into GCPR. Regular quarterly reviews of GCPR-Online and in-between updates, if applicable, ensure that GCPR is up-to-date and provides the latest trends.
Depending on the survey source and the release date of the local TRS survey, the update cycle for each section can vary across countries. The updates for each section typically are as follows:
• July: Base salary increases and economic trends.
• October: Base salary increases, economic trends, mandatory pay increase schemes, short-term incentives, attracting and retaining employees.
METHODOLOGY
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© 2016 Mercer LLC. 543 Global Compensation Planning Report — July Update
GLOSSARYCAREER LEVELS:
• Executive: Executives are the senior-most employees in the organisation. These generally include top executives and directors within the organisation, or employees with managerial responsibilities at the top level of a business unit or organisation. Executives are focused on defining strategies for the organisation.
• Management: Management refers to employees with important supervisory and managerial responsibilities, usually the higher levels within a business unit or organisation. Management-level employees focus on managing people and implementing policies and strategies to meet the organisation’s objectives.
• Professional sales: Formerly “Technical/Professional,” employees in a technical function or professional sales role are individual contributors without supervisory responsibility, but may provide coaching/mentoring to less experienced staff. This level of employees typically holds a university degree or full-trade equivalent.
• Professional nonsales: Formerly “Technical/Professional,” employees in a technical function or typically in a nonsales professional role are individual contributors without supervisory responsibility, but may provide coaching/mentoring to less-experienced staff. This level of employees typically holds a university degree or full-trade equivalent.
• Para-professional white collar: Formerly “Clerical/Technician” employees, salaried employees typically in a business support, analyst, administrative, or technical role are employees in skilled, semi-skilled, or unskilled roles without supervisory responsibility. This employee level does not require a university degree but may require formal professional training or certification, and may be paid on an hourly or a salaried basis.
• Para-professional blue collar: Formerly “Operations” employees, para-professional refers to production workers generally in the manufacturing sector. Operations employees may or may not be covered by collective agreements. Para-professionals are employees in skilled, semi-skilled, or unskilled roles without supervisory responsibility. This employee level does not require a university degree but may require formal professional training and certification, and may be paid on an hourly or a salaried basis.
GROSS DOMESTIC PRODUCT (GDP): GDP is defined broadly as the output of goods and services produced by labour and property. GDPhas five main components: private consumption expenditure, fixed capital formation, increase in stocks, government consumption expenditure, and the net of exports of goods and services less imports of goods and services. The GDP data in this report refers topercentage change over the previous year’s GDP, at a constant price.
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© 2016 Mercer LLC. 544 Global Compensation Planning Report — July Update
GLOSSARY
INFLATION: Inflation figures refer to the average annual changes in the consumer price index (CPI), which may differ from end-of-year figures. The CPI is an economic factor designed to measure changes over time in the price paid by households for the goods and services they normally purchase for consumption.
REAL SALARY INCREASE: An increase in salary after factoring in the effects of inflation on purchasing power.
SALARY INCREASES: Mercer collects data on salary increases through detailed surveys to representative companies with operations in each country analysed in this report. This figure includes merit increases, across-the-board increases, mandatory increases, and cost-of-living adjustments. It does not include promotional increases or any special adjustments to be made for internal equity or external competitiveness reasons.
SALARY INCREASES EXCLUDING ZEROES: Excluding zeroes represents salary increases of companies that actually do increase pay (excluding pay freezes).
SALARY INCREASES INCLUDING ZEROES: Including zeroes shows the increases of all companies, including those with pay freezes.
SHORT-TERM INCENTIVES: Rewards relating to the performance against selected criteria over a period of one year or less, which include performance-related bonuses, sales bonuses, sales commissions, profit-sharing schemes, other bonuses, and exceptional premiums.
UNEMPLOYMENT: Generally, data represents the percentage of economically active persons wholly unemployed or temporarily laid off. Unemployment generally comprises all persons above a specified age who, during the reference period, were without work, currently available for work, and seeking work. National definitions of employment and unemployment may differ from country-to-country.
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© 2016 Mercer LLC. 545 Global Compensation Planning Report — July Update
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16-GCPR-JULY
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