Employers nationwide are searching for inventive ways to tie employees’ pay to individual and company performance, while still remaining attractive in a competitive job market. “Variable” compensation is one way to accomplish these objectives and seems to be the wave of the future.
Variable compensation is becoming a more common method for rewarding employees while linking their performance to the company’s financial success. Some companies are allowing all levels of employees to participate in these programs. Executives of corporations have long been rewarded with bonuses for increased sales or productivity, so why not bring this same compensation method to middle management and even onto the factory floor?
It is really a rather simple concept that’s based on rewarding employees for increased sales or efficiency. Rewarding employees who increase productivity or efficiency provides incentive for other employees who want to share in the bounty. Rather than rewarding every employee with a pay raise or bonus, variable pay rewards the individual worker, or a team of workers, for extraordinary efforts.
For more information on Variable Pay methodologies and compensation plans, contact David Lingler at Cassady Schiller.