Is the 'Employer's Market' a Trap for Your Merit Strategy? (My Chat with CNBC)

Earlier today I had an opportunity to chat with CNBC Make It about a growing trend in compensation: the "Peanut Butter" raise.

The Strategic Risk

My take is that market leverage is a temporary tactic, but retaining top-tier performance is a long-term strategy.

Right now, some companies may see the cooler job market as an opportunity to simplify their merit process. They lean into "normalizing mediocrity" by spreading a thin 3% budget across the board, assuming that lower turnover in the broader market reduces the need for differentiation.

That is a significant strategic risk.

Why Differentiation Matters

If you aren't brave enough to give a 0% raise to an underperformer today, you’ll never have the budget to give a 9% raise to the MVP who is actually carrying the company into the next cycle.

When the market shifts (and it always does), the top performers who were "peanut buttered" during the lean times will be the first ones out the door.

The Bottom Line

A merit budget isn't a gift; it’s an investment strategy.

Stay tuned for the full article on CNBC!

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