Despite the economic downturn, most employers in the United States still plan to hand out decent pay raises next year, according to a new survey by global consulting firm Watson Wyatt Worldwide.

The survey, which will be published later this year, shows U.S. employers plan to give workers "merit increases" that will average 3.5 percent in 2009. That's the same average percentage increase given in 2008 and only slightly lower than the 3.6 percent average increase in 2007.

Companies also plan to award bigger raises to better-performing employees. Employees whose performance ratings "exceed expectations" will receive an average merit increase of 4.4 percent, while those who "far exceed expectations" are expected to receive an average 6 percent increase, the survey shows.

"The economy is no doubt taking its toll on workers, but their 2009 merit increases appear safe — at least for now," Laura Sejen, global director of strategic rewards consulting at Watson Wyatt, said in a statement. "Employees will view holding merit increase budgets steady as a positive sign that will help them offset inflation and higher energy and food costs."

This is not to say that we should all be rejoicing, many workers who receive a raise will be losing ground relative to inflation's pace. Even with a 3.5 percent raise, the rise in gas prices alone will likely absorb that extra income for many workers.

Consumer prices rose 1.1 percent last month from May, far faster than the expected rate of 0.7 percent and the biggest monthly spike since post-Hurricane Katrina September 2005, according to the U.S. Labor Department's latest data. The Labor Department's Consumer Price Index level for June was 5 percent higher than it was in the same month last year.

Moreover, should the economy take a steeper nosedive down the road, many employers are ill-prepared to handle it, according to Watson Wyatt.

Of the 1,389 employers who participated in the consultant firm's survey in May, including 276 U.S. employers, one-third of companies (33 percent) were found to have not made any workforce contingency plans in the event the economy does continue to falter.

Fortunately for two out of three U.S. employers, at least one formal contingency planning activity is in place in the organization. Among the most common:

• Layoffs (52 percent);

• Organizational restructuring (46 percent);

• Hiring freeze (39 percent);

• Smaller pay raises (27 percent); and

• Salary freeze (13 percent).

Globally, the majority of employers in Asia-Pacific, Europe and Latin America have contingency plans in place. More than eight in 10 employers in Asia-Pacific (84 percent) and Europe (80 percent) have established contingency plans, and seven in 10 (70 percent) of Latin American employers have plans. In Canada, six in 10 employers (60 percent) have adopted a contingency plan to be implemented in the event of further economic decline.

"The economic slowdown is clearly having an effect on companies worldwide and not just in the U.S.," Sejen noted. "If economic conditions continue to weaken, we would expect to see many companies begin to evaluate their staffing levels, pay programs and overall organizational structures and to implement some of their contingency plans."