• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

3

Ex-Google engineer says Larry Page, Sergey Brin and Sundar Pichai share the same trait—it's the lesson he swears by as a $7.2 billion AI CEO

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster

3

Ex-Google engineer says Larry Page, Sergey Brin and Sundar Pichai share the same trait—it's the lesson he swears by as a $7.2 billion AI CEO
Future of WorkTech

Companies are abandoning ‘peanut butter’ raises as pay-for-performance takes over the workplace in the AI era

Marco Quiroz-Gutierrez
By
Marco Quiroz-Gutierrez
Marco Quiroz-Gutierrez
Reporter
Down Arrow Button Icon
Marco Quiroz-Gutierrez
By
Marco Quiroz-Gutierrez
Marco Quiroz-Gutierrez
Reporter
Down Arrow Button Icon
May 9, 2026, 3:41 AM ET
Only about 4% of workers gave out "peanut butter raises" this year, according to a study by Mercer.
Only about 4% of workers gave out "peanut butter raises" this year, according to a study by Mercer.SimpleImages—Getty Images
Add Fortune on Google for similar content.

The hype around so-called “peanut butter” raises that distribute equal payments to every worker is falling flat as AI divides the workplace into super users and stragglers. 

Recommended Video

Companies have given out raises based on performance for years, but studies from earlier this year suggested this trend was shifting. About 44% of employers said they either planned to or were considering giving out equal raises to their employees this year, according to one study by compensation software company Payscale.

Yet, a new report by consulting firm Mercer shows this trend hasn’t actually panned out. Only about 4% of employers in the U.S. are giving out raises in this way, according to a recent survey by consulting firm Mercer. 

Part of the reason why, may be AI’s influence on a rapidly changing workplace. Just under 60% of business leaders say technology is key to their business strategy, according to a recent report by the advisory, tax, and assurance firm Baker Tilly, and some companies have pushed employees to fall in line.

Google has begun incorporating AI usage into performance reviews for software engineers, though managers have discretion over how it is measured, The Wall Street Journal reported earlier this year. Meanwhile, Accenture CEO Julie Sweet said last month that AI fluency is required for workers to be promoted.

Still, some white collar employees are resisting. A global survey of more than 3,700 executives and employees by SAP subsidiary WalkMe found that 54% of workers were bypassing their company’s AI tools to do their work manually, while another third said they hesitated to use AI because it makes their work more complicated.

And yet, another group of workers has responded to management’s push for AI adoption by going all in. These AI “super users” were three times more likely to have received a promotion and a pay raise in the past year, Dan Schawbel, managing partner at Workplace Intelligence, previously said in a statement to Fortune. 

This disparity between employees challenges the idea behind “peanut butter raises,” which aim to address some of the criticisms with merit raises, namely, that they are subjective and bias-prone, according to Payscale’s report.

While across-the-board raises may seem equal on the surface, high performers or AI super users may not see it that way, said Hannah Yardley, the chief people and culture officer at Achievers, a software company that tracks employee recognition and offers rewards.

“If you’re just being rewarded the same way as everybody else, or being told you’re doing the same job with everyone else, you’re going to feel that it’s equal, but not fair, if you’re contributing more to to the outcomes of what you’ve been asked,” she said. 

Factors like performance, but also market competitiveness and internal equity also play an important role in pay decisions, added Mercer senior principal Mark Bowling.

“Fairness in compensation often involves more than equal treatment,” he told Fortune.

Because not all employee contributions are equal, organizations wanting to leverage AI should institute performance-based raises, but they should also be constantly recognizing employees that go above and beyond so others in the organization know what the company’s priorities are, Yardley said.

“Not all work is created equal, and so for organizations, they should be differentiating in order to be able to set that standard for what value really means in the way that you’re delivering,” she told Fortune.

The Fortune 500 Innovation Forum will convene Fortune 500 executives, U.S. policy officials, top founders, and thought leaders to help define what’s next for the American economy, Nov. 16-17 in Detroit. Apply here.
About the Author
Marco Quiroz-Gutierrez
By Marco Quiroz-GutierrezReporter
LinkedIn iconTwitter icon

Role: Reporter
Marco Quiroz-Gutierrez is a reporter for Fortune covering general business news.

See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Future of Work

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Future of Work

Target worker stocks shelves
SuccessJobs
Target is starting to track employees’ unexcused lateness and absences with a points system—and if they rack up 12, they’re fired
By Emma BurleighJune 29, 2026
2 hours ago
Sofia
CommentaryLeadership
This CEO became 3x more productive with AI. Then she read what her daughter wrote about it at Dartmouth
By Maria Colacurcio and Sofia FreiJune 28, 2026
1 day ago
Photo of Bryan and Shannon Miles
SuccessEntrepreneurs
This entrepreneurial couple cashed out their 401(k)s and sold a $126 million company—now they run a U.K. soccer team
By Emma BurleighJune 28, 2026
1 day ago
Matt Garman speaks on stage in front of a screen showing colorful concentric circles on a black background.
Future of WorkAmazon
AWS CEO says replacing young employees with AI is ‘one of the dumbest ideas’—and bad for business: ‘At some point the whole thing explodes on itself’
By Sasha RogelbergJune 28, 2026
1 day ago
Anthony Scaramucci
Commentary250 Years of Innovation
Anthony Scaramucci on America 250: where have you gone, Joe DiMaggio?
By Anthony ScaramucciJune 28, 2026
1 day ago
Young real estate agent with clients at house
SuccessJobs
LinkedIn says real estate is one of the hottest industries for entry-level workers—One Gen Z sales agent made $75K his first year with no experience
By Emma BurleighJune 28, 2026
1 day ago

Most Popular

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
4 days ago
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
Success
Philanthropy leader at Warren Buffett and Bill Gates’ Giving Pledge says children of billionaires are pushing them to give their wealth away faster
By Preston ForeJune 27, 2026
2 days ago
Ex-Google engineer says Larry Page, Sergey Brin and Sundar Pichai share the same trait—it's the lesson he swears by as a $7.2 billion AI CEO
Success
Ex-Google engineer says Larry Page, Sergey Brin and Sundar Pichai share the same trait—it's the lesson he swears by as a $7.2 billion AI CEO
By Orianna Rosa RoyleJune 28, 2026
1 day ago
Cristiano Ronaldo is soccer's first-ever billionaire: He went from begging for burgers outside McDonald's to landing a $400 million contract
Success
Cristiano Ronaldo is soccer's first-ever billionaire: He went from begging for burgers outside McDonald's to landing a $400 million contract
By Preston ForeJune 28, 2026
1 day ago
The retired college professor fighting a $313 trespassing ticket in Wisconsin thinks he's part of a national struggle
Environment
The retired college professor fighting a $313 trespassing ticket in Wisconsin thinks he's part of a national struggle
By Catherina GioinoJune 28, 2026
1 day ago
Iran is forcing the U.S. into an escalation trap as a 'shadow war' over the Strait of Hormuz heats up that could kill the tenuous ceasefire
Politics
Iran is forcing the U.S. into an escalation trap as a 'shadow war' over the Strait of Hormuz heats up that could kill the tenuous ceasefire
By Jason MaJune 28, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.