A Towers Watson survey found that companies are budgeting merit pay hikes of 3 percent for 2011. This compares with the average 2.7 percent merit increase awarded to employees in 2010 and is the largest merit increase since before the financial crisis when increases typically averaged 3.5 percent to 4 percent, according to the benefits consultancy.

Companies are also planning to provide some reinforcements for their overworked employees.

Towers Watson's survey found that the hiring freezes that companies implemented during the recession are being lifted.

For example, 42 percent of companies are planning to hire workers for positions that require critical skills this year, while 40 percent plan to add professional and technical workers. In addition, 25 percent plan to hire sales professionals and hourly workers this year.

But, this is easier said than done. Surprisingly given the high level of unemployment in general nationwide, more than half of the companies (54 percent) that participated in the survey reported problems attracting critical-skill workers, while 37 percent are having difficulty hiring top-performing employees.

The survey included 381 large and midsize US employers representing a broad range of industries.

Meanwhile, the hiring thaw is finally giving disgruntled employees a chance to leave to move to another job.

The survey found that about three in 10 companies reported problems retaining critical-skill employees, while one in four are having difficulty retaining top performers.

"As companies map out and implement their strategies to grow in a recovering economy, their ability to use not just pay but also the full complement of other reward and talent management programs to attract, engage and retain the best possible talent will be critical to their success," said Laura Sejen, global head of rewards consulting at Towers Watson.

Still, not every company is sharing the growing optimism.

For example, 13 percent of companies plan to freeze salaries for executives while 12 percent plan to freeze salaries for hourly workers. However, Towers Watson does stress both figures are down sharply from 2010.

"Most companies have turned the corner and are now in a much stronger position financially to recognize and reward employees, especially their top performers" said Sejen.