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

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. 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