A proposal by the Arlington County Board to end merit pay increases for county employees was withdrawn on Friday in the face of anger from labor unions and police, firefighters and other workers.

The raises, usually about 3.5 percent for employees who have met performance standards and have not reached hit their position’s maximum salary level, were included in the budget proposed by County Manager Barbara Donnellan in February.

But the board announced Wednesday that, as part of a plan to cut real estate taxes, merit pay steps would be replaced with a 1 percent annual cost-of-living increase and a one-time $500 bonus for county employees. Board members trimmed the real estate tax rate from $1.006 per $100 of assessed value to $0.996 per $100, to limit the growth of tax bills in the face of a 5.3 percent jump in home values, assistant county manager Diana Sun said.

Merit pay increases cost the county $5.5 million last year, Sun said.

The police and firefighters unions protested the elimination of the program, with union officials saying that the board should have announced the proposed cut earlier so they would have a chance to weigh in during public hearings and budget markups. The board’s decision came at the last meeting before a vote on the budget, scheduled for Tuesday.

“Not only is this budget cut targeting employees in one of the most expensive places to live in the U.S., it also was made at the 11th hour, outside of Arlington’s well-accepted and long-established budget process,” a statement from the Arlington County Police Association said.

Matt Conway, a spokesman for Local 2800 of the International Association of Fire Fighters, said the decision to cut merit raises “was out of the blue.”

Board chair Jay Fisette (D) said county lawmakers “tried to listen” to the concerns expressed by the unions and decided Friday to look for savings elsewhere.

“We have great employees,” Fisette said. “We have to be economically competitive to attract and retain the people we do.”

Fisette said the county would make up for the cost of the merit increases by instituting a “hiring slowdown,” which means not filling every open position immediately, and cutting a handful of new positions that were proposed in the budget.

Officials said a proposal to give employees who have reached the top of the pay scale an annual 1 percent salary bump will remain in the budget as well.

County police offers are “very appreciative that the board listened to our concerns and changed their minds in this regard,” said Matt Martin, a vice president in the police union. “It just shows that they do listen when employees have concerns.”

Charles Smith, executive director of Local 3001 of the American Federation of State, County and Municipal Employees, which represents county employees, said he thought the proposal to do away with the pay increases might have been a reaction to the recent election of John Vihstadt to the board.

Vihstadt, the first non-Democrat elected to the panel since 1999, criticized county spending, particularly on capital projects, during his campaign. “I think this is playing politics with the workers,” Smith said. “It’s a sign of the times.”