Your raise might look a little nutty in 2026.

According to new research, 44% of companies plan on or are considering using “peanut butter”-style increases, choosing to spread pay increases evenly across the board rather than opt for merit-based raises.

Payscale’s 2026 Compensation Best Practices Report found that the growing interest in “peanut butter increases” is expected to be a big trend this year.

The company noted that raises are expected to hold steady at 3.5% in 2026 — the same rate as 2025.

The compensation experts noted that, traditionally, salary increases are tied to performance and “merit pay is still a best practice” — but the conventional practice has faced criticism in recent years.

Some employers are moving away from merit-based raises due to concerns that they can be subjective and biased.

Performance-based pay increases can also be “administratively complex,” and steering away from them can save a company money.

“Some organizations, particularly those with large frontline or lower-wage populations, are rethinking their compensation differentiation as inflation continues to affect workers unevenly,” according to the report.

Peanut butter raises first gained popularity after the Great Recession, when companies were strained financially, and Ruth Thomas, chief compensation strategist at Payscale, told CBS News that companies are experiencing that once again.

“We’re now seeing a slow decline in pay increase budgets again, so it’s easier to give everyone a relatively flat increase,” Thomas said.

Still, nearly half (48%) of companies plan to implement raises based on performance, making it the most prominent method, and 8% of organizations are unsure about the method.

Even taking into consideration the subjectiveness of merit-based raises, there are also negatives to using peanut butter increases.

Across-the-board raises can end up discouraging employees from putting in extra effort if they don’t expect to be compensated for it.

“With no differentiation based on performance, it’s easier to give everyone something. But there is a risk that top performers will feel disadvantaged in that environment,” Thomas said.

However, there are workarounds in these situations. Thomas explained that companies can opt to reward employees with bonuses or promotions instead.