The data shows that employees in managerial roles have received higher pay rises in 2011 than those in executive positions, as companies target scarce resources toward perceived ‘rainmakers’.

The average increase for the Middle East remains far higher than those received by executives in Western Europe with executives in Pakistan receiving 13.5 percent higher salary increase than the regional average and all of their Middle Eastern peers.

Mercer’s Pulse Survey analyzes data from 406 subsidiaries of multinational organizations with operations in over 60 European countries.

While the data covers median salary increases for a variety of employee groups, this release focuses on executive pay rises as reported by all organizations including those freezing salaries.

Executives are defined as employees who lead an organization, business area or corporate staff function, such as head of IT (information technology) or HR (human resources).

Senior associate Oxana Nagy of Mercer Dubai office evaluated the Europe results before commenting on the Middle East results and said: “Europe plc has patiently sat through several years of pay freezes so this data is a welcome indication that spring has come. However, the relatively low increases in Western Europe reflect the continued uncertainty in this market compared to other regions. We’ve also noticed two trends emerging as a result of the continued need to keep costs low: Companies are continuing to segment their employees and often weighting scarce resources toward ‘rainmaker’ employees, such as managerial staff. Companies are also increasingly reliant on using non-financial forms of reward to motivate and retain their other employees.”

Broadly, 2011 salary increases were higher among companies in the service, consumer and high-tech industries and lowest among the financial services and energy organizations.

However, the average salary increases hide great variation in the country-by-country pay increases and substantial differences across EMEA.

Executive salaries are set to increase by an average of 5.7 percent in the Middle East and 8.2 percent in Africa. Qatari executives received the lowest pay rises in the Middle East of (four percent) followed by executives in Kuwait (4.5 percent), Saudi Arabia (five percent) and the UAE (five percent). Executives in Bahrain and Pakistan have received the highest pay rises in the Middle East with pay rises of six percent and 13.5 percent respectively.

In Africa, average salary increases (8.2 percent) hide wide differences by country. In South Africa for example, companies are anticipating a salary increase of 7.5 percent, while those in Nigeria, Kenya and Uganda are anticipating increases of 10 percent, 8.8 percent and 10 percent respectively. Executives in Morocco and Senegal have received pay rises of 5.5 percent.

“Around 10 percent of companies are maintaining their salary freezes, down from 20 percent in 2009,” said Nagy.

“In this region, there is a fierce race for local talent, partly created by the fact that, in a region where companies typically don’t offer retirement packages, expatriate staff view employment in this region as short term, so there is a pressing need to train and develop local staff. Broadly, this is increasing salaries of the managerial level above those of executives, where much of this talent currently resides. In consequence, staff development is becoming more important as part of this trend.”

She added: “Given the impact that dissatisfied and unproductive employees can have on a business, it is important that companies follow the guiding principles for reward: communicate well, administer efficiently to maximize results and ensure that governance is consistent. With these three elements in place, companies can make the most of the resources that they have while continuing to motivate and engage their staff.”