Volume XXIV, Number 7 (Issue 1168) February 16, 2026
Peanut Butter? Really?
I stumbled across an article on LinkedIn News last week – it was also addressed in a Korn Ferry publication in recent days – that talked about “peanut butter pay raises.” The peanut butter reference seemed strange, so I read on.
As it turns out, the premise of the article is that more and more companies (forty-four percent according to PayScale’ 2026 Research Report) are embracing a strategy where raises are spread evenly across an organization, i.e., every employee receives the same percentage increase. Among the rationales offered for this approach is it simplifies the pay decisions since there is no need to spend managers’ time differentiating between performance levels or having to defend those decisions. It is also argued that such uniformity will cut down on disputes with employees who feel they are deserving of a larger increase compared to some of their colleagues. Finally, it is felt that uniform increases eliminate the risk of easy grader and hard grader evaluations that so often lead to inequitable adjustments.
Personally, I was dumbfounded by the notion of uniform raises, let alone the possibility that everyone is being paid the same as it negates the idea that life is a meritocracy. Do not misinterpret what I am saying. I completely subscribe to the concept of equal pay for equal work. Gender, ethnicity, even tenure should not be the basis for what someone is paid – other than tenure can enable individuals to do the work more quickly and more accurately than might someone with less tenure. Of course, there is a glaring difference between ten years’ experience and one years’ experience ten times over.
Such lack of differentiation reminds me of the “everyone gets a trophy era,” where the thinking was we must avoid hurting or embarrassing someone because they did not “win” or come in first. If that is how we want to operate why hold the Olympics or any other sports competition? As for
making it easier on the manager, evaluating and developing their people is an essential part of every manager/leader’s job.
I recall a consulting engagement from many years ago where the client had a longstanding practice of giving every employee a three percent raise plus a three percent bonus at the end of the year. But when a new Director of HR joined the organization, he immediately recognized the folly of such a model. After all, such uniformity provides little incentive to those who loaf their way through the workday to work harder or smarter whereas the producers soon learn that apart from personal pride there is little incentive for them to give their best. In short, uniform pay/raises/bonuses are a disincentive that harms everyone including the organization. To solve this problem, we guided the business through a process that implemented a version of a forced ranking system where top performers were identified and rewarded generously while poor performers received a modest raise, if any, and no bonus. It should be noted the poorer performers did receive periodic coaching meant to improve their performance going forward.
Bottom line: any system where people are not personally accountable for their actions and attitudes and rewarded for same is bound to fall far short of its potential. As much as we might like to think (hope) that everyone is self-motivated, personally accountable, and altruistic to a fault, experience tells us that recognition for results and good work (whether that recognition takes the form of pay, praise, or both) yields better results over the long term.
Soli Deo Gloria
“You will eat the fruit of your labor; blessings and prosperity will be yours.” Psalm 128:2
J. Keith Hughey
Mobile: (210) 260-0955
E-mail: keith@jkeithhughey.com
Website: www.jkeithhughey.com
Transforming Potential into Unmatched Performance
Copyright 2026 by J. Keith Hughey. All rights reserved. Permission is hereby granted for reproduction and redistribution of this essay as provided under the copyright laws of the United States of America. Recent issues of Musings may be found at www.jkeithhughey.com. Your comments are both welcomed and encouraged.