Salary increases are slowly trending upward toward pre-recession levels, according to the 38th Annual WorldatWork Salary Budget Survey. Participating organizations reported awarding at least some base salary increase to 88% of all employees in 2011 on average, compared to 86% of all employees in 2010, 80% in 2009 (all-time low), and 91% from 2006 to 2008. This year’s 88% figure shows not all organizations are fully recovered.

Depending on performance ratings, this year low performers can expect an average pay increase of 0.7%, middle performers 2.7% and high performers 4.0%.

Only 3% of employers are planning across-the-board salary freezes compared to 43% in 2009 and 10% in 2010. The actual increase in salary budgets was 2.8% in 2011 and is projected to rise again by 2.9% in 2012, according to the survey.

“The situation where significant numbers of employees are not receiving any pay increases appears to be over for now,” said Kerry Chou, CCP, compensation practice leader at WorldatWork. “However a quick return to pre-2008 budget levels seems unlikely given the modest rate at which budgets are recovering.”

“Unemployment rates may be playing a significant role in keeping salary budget planning at moderate levels,” said Alison Avalos, CCP, research manager at WorldatWork. “The law of supply and demand is also at play: employers don’t need to plan for high pay increases because there are more employees than there are jobs.”