Lesson Aim
Students discuss whether pay rises should be distributed equally or based on individual performance, using workplace vocabulary and advanced structures for comparing trade-offs.
Before watching
- Should everyone in a company receive the same percentage raise?
- Is merit-based pay always fair?
- What motivates employees more: salary increases, bonuses, promotion or recognition?
Should hard work literally pay off?
Click the thumbnail to watch.
Prep for Part 1: Vocabulary Matching
Choose the correct meaning.
1. across-the-board raise
2. merit-based increase
3. administratively complex
4. allocate
Watch Part 1
Watch from 0:00 to about 1:19. Focus on what peanut butter increases are and why companies might use them.
Open Part 1 on YouTubeOne-Minute Gap Fill
Complete this one-minute extract from the tapescript using the words in the box.
Should hard work literally pay off? A new report finds that nearly half of US companies could give identical raises to all employees this year instead of varying them based on individual . These types of raises are often referred to as peanut butter increases because they are evenly across the workforce. A new report from compensation data company Payscale finds 18% of organisations are giving these types of raises in 2026. Administratively, it is much less for companies. You are spreading the compensation around evenly across your entire workforce versus merit-based increases, which require more specific employee and can be more .
Options
across-the-boardmeritspreadconsideringcomplexbudgetreviewscumbersomeinflationpromotionComprehension 1
1. What are “peanut butter increases”?
2. What percentage of organisations are considering these raises in 2026?
3. Why are peanut butter raises administratively easier?
4. What criticism is made of merit-based raises?
5. What is one possible advantage of peanut butter raises?
Prep for Part 2: Vocabulary Matching
Choose the correct meaning.
1. inflation
2. top performer
3. incentive
4. base pay
Watch Part 2
Watch from about 1:20 to the end. Focus on expected pay increases, inflation, employee concerns and alternative rewards.
Open Part 2 on YouTubeLast-Minute Gap Fill
Complete this extract from the last minute of the tapescript using the words in the box.
The cons to these peanut butter style raises are that top may say, “How am I being acknowledged for my hard work or going the extra ? I stay late. Where is my ?” Researchers found there are other that companies can pull to make sure these employees feel acknowledged and . Companies can award them or promote them, and that will boost their base , even though they would still get the same 3.5% as everyone else.
Options
performersmileincentiveleversrecognizedbonusespayraiseinflationbudgetComprehension 2
1. What average pay increase is expected?
2. What are smaller firms expected to do?
3. Why might smaller firms offer larger increases?
4. What is one concern top performers may have?
5. What other levers can companies use?
Vocabulary Review
| Expression | Meaning | Example |
|---|---|---|
| peanut butter increase | a raise spread evenly across employees | Some companies are considering peanut butter increases. |
| merit-based raise | a raise based on individual performance | Merit-based raises require employee reviews. |
| compensation budget | money a company has for pay and rewards | The compensation budget is spread across the workforce. |
| talent pool | the group of possible workers a company can attract | Smaller firms may raise pay to attract talent. |
| base pay | regular salary before bonuses | A promotion can boost base pay. |
Phrasal Verbs and Expressions from the Video
Drag the correct expression into each sentence.
Companies may decide to the same raise to everyone.
Smaller firms may need to bigger companies for talent.
They may have to their talent pool.
Top performers may feel they without enough recognition.
Companies can such as bonuses and promotions.
Options
hand outcompete withdraw workers intogo the extra milepull leversbreak downUse the Same Phrasal Verbs to Form Questions
Use the same phrasal verbs and expressions from the previous exercise to complete the questions.
1. Should companies identical raises to everyone?
2. How can small firms bigger companies for talent?
3. What benefits can a company’s talent pool?
4. How should companies reward employees who ?
5. Which non-salary levers can managers to recognise performance?
Options
hand outcompete withdraw workers intogo the extra milepulltake it easyCollocations from the Video
Drag the correct word to complete each collocation.
raises
merit
budget
reviews
performers
pay
Options
across-the-boardindividualcompensationemployeetopbasemedicalB2/C1 Grammar: Comparing Compensation Strategies
This video compares two systems: equal raises and merit-based raises. The grammar focus is on contrast, concession and cautious evaluation.
Grammar Section 1: Contrast and Concession
1. Complete: “___ peanut butter raises reduce bias, they may demotivate top performers.”
2. Which sentence is correct?
Grammar Section 2: Cautious Business Language
1. Which sentence is the most cautious and professional?
2. Complete: “There is a risk that top performers ___ undervalued.”
Grammar Section 3: Alternatives and Trade-Offs
1. Complete: “Rather than increasing everyone’s salary differently, companies can ___ bonuses.”
2. Which sentence best expresses a trade-off?
Thought-Provoking Questions
Discuss these questions in pairs or small groups. Give reasons, examples and possible consequences.
1. Are equal percentage raises fair, or do they ignore individual effort?
2. Is merit-based pay a better motivator, or does it create bias and competition?
3. Should inflation be the main factor when deciding annual pay increases?
4. How should companies reward employees who consistently go the extra mile?
5. Do bonuses and promotions solve the problem of equal raises?
6. What is more important in compensation: simplicity, fairness, motivation or cost control?
7. Would you prefer a guaranteed small raise or the chance to earn a larger performance-based raise?
Role Play
| Discussing fairness | Discussing motivation | Negotiating a policy |
|---|---|---|
| From a fairness perspective... This could reduce bias because... The issue is whether... | Top performers might feel... This could motivate/demotivate employees by... An alternative incentive would be... | We could combine both systems by... One condition should be... The company should also... |
Context
Student A
You are the HR director. You support peanut butter increases because they are simpler, more predictable and may reduce bias.
Student B
You are a department manager. You support merit-based raises because top performers need stronger recognition and incentives.
Role play task: Negotiate a final compensation policy. Include one rule for ordinary raises, one rule for top performers and one way to avoid bias.
Thank You
You have completed the ESL CONNECT video lesson.