Compensation budgets are expected to stay intact in 2011, and few companies plan to take extreme measures, including pay freezes to lower costs, finds a new Aon Hewitt survey of more than 500 employers.

Three-quarters of companies also anticipate hitting or surpassing business performance goals this year, the survey also reveals, causing pay and variable pay budget stabilization in 2011. Fifty-six percent of companies made no modification to their original base salary increase budgets, and those are projected to reach their highest levels in two years. Salary raises for salaried exempt workers, who are excluded from overtime rules, are predicted to hit 2.8 percent in 2011 - up from 2.4 percent in 2010, and 1.8 percent in 2009 when employees faced record-low pay raises.

"Prior to the recession, companies were optimistic about their compensation budgets but, ultimately, scaled back from their original projections in an effort to control costs," says Ken Abosch, marketing strategy and development leader in Aon Hewitt's Broad-Based Compensation Consulting practice. "As business performance increases, organizations are more comfortable with stabilizing salary budgets.