‘Peanut butter’ pay raises could cost companies their top performers, according to experts: 'It's such a shortsighted strategy'

More companies are leaning into “peanut butter” pay increases this year, according to Payscale’s Pay Increase Preview Report.

The term refers to across-the board raises “that are even and spread thinly, like peanut butter would be on a sandwich,” according to career coach Colleen Paulson.

About half — 48% — of surveyed organizations said that they will continue giving out pay increases based on performance, according to Payscale.

But the report found that plenty of companies are contemplating “peanut butter” raises: Along with the 9% of organizations that already practice across-the-board pay increases, 16% said they were newly planning to implement the approach this year and 18% said they were considering it.

“There’s always a tension in organizations of how to how to balance the needs of your high performers while taking care of the entire group,” says Scott Hoffhines, a compensation expert and the vice president of rewards and systems at SalesLoft, especially when companies have “limited resources.”