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The debate around 'peanut butter' raises is colliding with a workplace increasingly divided between AI adopters and employees reluctant to engage with the new technology, prompting a rethink of compensation strategy.
Earlier this year, studies suggested more employers were considering equal pay increases for all workers - so-called 'peanut butter' raises. About 44% of employers said they either planned to or were considering giving out equal raises to employees, according to research by compensation software company Payscale.
But a more recent survey by consulting firm Mercer found that only about 4% of employers in the US are actually distributing raises this way.
The shift is happening as AI adoption becomes increasingly tied to performance expectations and career progression inside large organizations. Just under 60% of business leaders said technology is key to business strategy, according to a recent report by Baker Tilly.
Some employers are already formalizing those expectations with Google incorporating AI usage into performance reviews for software engineers, while Accenture CEO Julie Sweet said AI fluency is required for workers to secure promotion.
AI adoption creates compensation divide
At the same time, resistance to workplace AI remains significant. A global survey by WalkMe found that 54% of workers were bypassing company AI tools and completing work manually, while another third said AI made their work more complicated.
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Another group of employees has responded very differently, however. AI “super users” were “three times more likely to have received a promotion and a pay raise in the past year,” according to Dan Schawbel, Managing Partner at Workplace Intelligence.
It's a divide that is becoming increasingly difficult for compensation teams to ignore. Equal raises were originally positioned as a response to criticism that merit pay systems can become subjective or vulnerable to bias.
Organizations accelerating AI adoption, however, are now confronting a new challenge around how to reward employees contributing disproportionately to productivity and transformation goals.
“If you’re just being rewarded the same way as everybody else, or being told you’re doing the same job with everyone else, you’re going to feel that it’s equal, but not fair, if you’re contributing more to to the outcomes of what you’ve been asked,” said Hannah Yardley, Chief People and Culture Officer at Achievers.
Performance pay returns to the forefront
Compensation specialists say organizations are now balancing multiple pressures simultaneously, including performance, retention, competitiveness, and internal equity.
“Fairness in compensation often involves more than equal treatment,” Mercer Senior Principal Mark Bowling told Fortune.
Achievers CPO Yardley added that organizations looking to leverage AI effectively should combine performance-based raises with visible recognition for employees driving results.
“Not all work is created equal, and so for organizations, they should be differentiating in order to be able to set that standard for what value really means in the way that you’re delivering,” she told Fortune.
The debate seems to be shifting from whether AI changes performance expectations to how compensation structures can adapt once those expectations begin producing different levels of employees inside the same workforce.
