Performance Raises Return in 2027, But Don't Expect Big Numbers
Pay bumps tied to performance are making a comeback, but workers should temper expectations as increases stay modest.
Performance-based raises are back on the table for 2027, and that's the good news. The bad news? Don't go planning that yacht purchase just yet. Companies are bringing back merit pay structures, but the increases are expected to stay lean.
This signals that employers are regaining confidence in rewarding top performers after years of across-the-board adjustments. But "modest" is doing a lot of heavy lifting here. If you're banking on a fat raise to outpace inflation, you might want to have a backup plan.
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The return of performance pay matters more than the size of the bump itself. It shifts leverage back toward high performers — the workers who consistently deliver results have a real case to make at review time. If that's you, start building that case now, not in December.
For the average worker, though, this is a reminder that the days of blanket wage hikes are fading. Employers are getting selective. Your raise will increasingly depend on what you actually did this year, not just how long you've been around.
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