Variable Pay Plan. Factors to consider for Variable pay 1. In essence the organization shares success and risk with employees.
Variable pay is one of the five main components of total rewards in any organisation and is usually a percentage of fixed pay. Your own performance and your companys performance. So most schemes evolved by companies have a target-setting and actual payout based on that combination.
This allows organizations to align compensation expenses with results.
Business owners use variable compensation programs to influence employee performance. However this concept has drawbacks because the possibility of gain is tied to the possibility of loss. A variable-benefit plan is a type of retirement plan in which the payout changes depending on how well the. Understand how your rival is compensating people at similar levels.
