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Employees in the UAE are in line for an average salary increase of five per cent in 2014, the second successive year the average pay rise in the emirates has dropped by 0.1 per cent.
The study, by Aon Hewitt, found that companies across the Gulf are predicting an average pay hike of 5.5 per cent for staff, with the highest rise (six per cent) expected in Saudi.
The five per cent rise for the emirates follows average salary hikes of 5.2 per cent in 2012 and 5.1 per cent in 2013. The report said the figures indicate economic stability and a continued confidence in the country's business environment.
The survey which polled 500 companies across the Middle East with 180 from the UAE showed a clear if unsurprising correlation between performance level and salary increase.
A rise of 7.2 per cent could be expected for employees who were far exceeding expectations' while those not meeting expectations could expect only a 0.1 per cent rise.
"Whilst linking individual performance to pay is not uncommon, we advise employers to use annual bonus payments as the larger component for rewarding high performers," said Robert Richter, compensation survey manager, Aon Hewitt Middle East.
"Salary increases typically take into a consideration a number of other factors as well as performance, including inflation, rises to reflect promotions, and the need to ensure that employees at the same grade remain within a single pay band."
Companies in Kuwait and Oman predicted an average salary rise of 5.6 per cent for its employees while Bahrain staff can expect a jump of 5.2 per cent.
Inflation also expected to fall to around 2.7 per cent, report finds
Salaries across the GCC are predicted to rise by five per cent in 2015, according to Aon Hewitt.
Megaprojects in the pipeline and the ramping up of social infrastructure spend is boosting the market, says new report.
Infrastructure project awards across the GCC are forecast to exceed $86 billion in 2014, up 77.8 per cent over 2013, a new report says.