Tag Archives: inflation

What About Inflation?

Warren Heaps – Birches Group LLC

In one of my recent posts, I explained why employers should be careful how they use devaluation as a factor in setting changes to salaries.  One reader sent me a long note describing her dilemma in managing the merit budget approval process for international locations in her company, specifically, how should she take inflation into account?  I realized that my conversation with this reader would probably be of broader interest, so I decided to write this follow-up post.

The fundamental question is:
How should inflation be considered when determining salary increase budgets?

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