Economic troubles are leading companies to offer lower raises — while still doing what they can to keep high performers.

Almost half (42%) of companies plan on changing their compensation strategies because of concerns about cost, according to a recent survey by HR consulting firm Hewitt Associates.

Of that 42%:

• 66% plan to cut year-end bonuses by more than 10%
• 49% will reduce raises, and
• Overall, salaries will increase by 3.1%, or 1% lower than companies had previously expected.

However, many companies are using their limited budgets to focus on retaining star workers:

• 38% of employers said they’re reserving part of their salary budgets to make sure high performers get decent increases
• 23% are creating new discretionary, performance-based bonus pools, and
• 20% are offering retention bonuses to employees who stay with the company for a certain amount of time.

Tags: Hewitt, high performers, raises, salary