First of all, cost of living goes up gradually, so at the very least, it makes sense to have your satisfactory performers not literally lose purchasing power in

First of all, cost of living goes up gradually, so at the very least, it makes sense to have your satisfactory performers not literally lose purchasing power in their base salary year to year. Or if that's not compelling because a corporation doesn't concern itself with its employees' finances, at the very least, it should be tracking the market, which is liable to change from year to year. When it comes to me, policy is whatever; at the end of the day, no matter how my comp package is arranged, I'll be looking after my bottom line. If I'm not happy, I'm confident in my ability to seek a better deal. I'd have to really believe bonus-based comp is likely to work out in my favor, at least on the timescale of a few years. Longer than that, it's not appealing, due to the lack of compounding of bonuses. But I feel like as a developer, I'm a bit insulated from concerns of the mainstream labor market. I just worry that for people without a whole lot of mobility, this is just another step toward institutionalizing wage stagnation. > Moreover, managers are reluctant to increase base pay further because higher payroll costs could result in heftier prices for customers, says Tom McMullen, a senior compensation partner with Korn Ferry Hay Group. That's rich.