Companies ditch'peanut butter' raises as pay-for-performance takes over the workplace in the AI era
Fortune • • business
Key Points:
- Despite earlier studies suggesting a shift toward equal raises for all employees, a recent Mercer survey found only about 4% of U.S. employers are actually giving raises this way, contrasting with the 44% who had considered it.
- AI's growing role in the workplace is influencing performance evaluations, with companies like Google integrating AI usage into reviews and Accenture requiring AI fluency for promotions, though some employees resist using AI tools.
- Employees who heavily adopt AI ("super users") are significantly more likely to receive promotions and raises, highlighting disparities that challenge the fairness of across-the-board "peanut butter" raises.
- Experts emphasize that fairness in compensation involves more than equal treatment, advocating for performance-based raises and ongoing recognition to reflect differing employee contributions, especially as AI reshapes work priorities.
- Organizations are encouraged to differentiate rewards to set clear standards for value and performance, ensuring that pay decisions consider market competitiveness, internal equity, and individual impact rather than uniform raises.
