Syndio Research

The Last Mile of Strategy

Companies say they “pay for performance.”
But how many actually do?

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We studied pay for 158,403 employees at 46 organizations. Here is what we found.

Performance ratings don’t explain much
about what people are paid.

Where you work and your job level
explain most of what you’re paid.

0.0%
of the differences in pay

Your guess

So how much does a performance rating explain?

On top of that 71.5%, drag to guess how many more points a performance rating adds.

10.0percentage points
NoneThe rest, 28.5

Answers are saved anonymously and used only in aggregate.

What a performance rating adds

0.25percentage points

Where someone works and their job level already account for 71.5 percent of the differences in pay. The rating takes that to 71.8.

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Source: Syndio analysis of base pay, 158,403 U.S. employees at 46 organizations.

Employer and job levelPerformance rating

What explains pay

Why is one person paid more than another?

Our analyses sized four reasons:

Scroll to pull them apart.

Syndio analysis of base pay for 158,403 U.S. employees at 46 organizations.

The pay for performance illusion

A higher rating doesn’t
always pay more.

In about one group in four

0%
26%The rest

In 26% of the 170 groups studied, people with higher ratings earned less than people with lower ratings. Each group is employees in the same job level at the same company. Includes bonus and commission.

About

0%

Each step up in rating comes with about 5% more base pay, for people at the same company and job level. It does not add up to much. In the median organization about three in five employees get the same rating, “Meets Expectations,” and merit budgets run 3 to 4 percent.

Syndio analysis of 158,403 U.S. employees at 46 organizations (base pay) and 163,343 at 53 organizations (total cash, including bonus and commission). The 3 to 4 percent merit range is from WorldatWork, Salary Budget Survey 2024–2025.

The last mile

Compensation is where strategy gets tested.

  1. A woman in a navy sweater, seated at a table with her hands clasped

    The board sets the strategy.

  2. A man with glasses, seated, looking off to the side

    The talent plan turns it into roles and priorities.

  3. Three colleagues in conversation around a laptop

    Then thousands of pay decisions carry it out: every offer, promotion, raise, and counteroffer.

Each one either backs the
strategy or undercuts it.

Most companies budget pay as one line item
and never look at the decisions inside it.

Check your own pay data

Three questions to ask before your next merit cycle.

Your HR system already holds the answers. Which can you answer today?

Answers are saved anonymously and used only in aggregate.

At the same job level, do higher-rated employees earn more than lower-rated ones? What about bonus?

Compare with Syndio’s data: about 5% more base pay per rating step. In 16% of groups, higher-rated people earn less on base pay. On total cash, it’s 26%.

What share of your employees get the middle rating?

Compare with Syndio’s data: in the median organization, about three in five rated employees get “Meets Expectations.” In some, nearly everyone does.

Last year, how much of your raises outside the merit cycle, not counting promotions, went to matching outside offers?

If no one wrote down why, that is the finding. Empty reason codes mean you can’t say how much you spent matching outside offers.

Tap an answer on each question.The research shows how to answer each one.

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The Last Mile of Strategy

Find out what your pay
decisions actually reward.

The full research goes deeper. Here’s what’s inside:

  • The methods behind every number, and what the data can and can’t tell you
  • One pay decision, priced three ways: what a counteroffer really costs
  • Step-by-step ways to run the three questions on your own pay data
Cover of The Last Mile of Strategy research report

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