Variable Pay Strategy : Is it Required?

Variable pay is increasingly been used as an effective tool in many foreign countries to communicate the linkage between individual performance and organization's business objectives, as well as to drive and reward higher performance. In emerging markets like India where talent performance and reten

393 Views|Posted 2012-02-11 10:25:24

Started by Suni K

12 Comments

Sort by:

Commented by

Suni K | Guide-Level 14

2012-02-21 18:42:40

There might be some issues & challenges HR practitioners will have to face in the areas of Variable Pay:- Variable pay strategy Designing a variable pay plan Communicating, implementing and administering a variable pay plan Evaluating variable plan effectiveness Trends & next pr

Upvote

Commented by

Aru Chopra | Guide-Level 11

2012-02-20 16:30:42

By introducing variable pay, the management would ensure that employees are motivated to contribute individually and as a unit and a division and finally as part of the whole company.

Upvote

Commented by

Aru Chopra | Guide-Level 11

2012-02-20 16:29:58

Variable pay is defined as direct compensation that does not become a permanent part of base pay/salary and which may vary in amount from period to period. Other names for variable pay include: incentive compensation, incentives, bonuses, commissions, cash awards and lump sums. The practice of linki

Upvote

Commented by

Suni K | Guide-Level 14

2012-02-19 18:57:13

One can also imagine the other side of the coin. ie; Individuals competing with each other, not allowing the subordinate to perform, trying to outperform others or acting smart in front of the boss and so. Can you imagine of such a situation? Do we want an incentive motivated work environment? How w

Upvote

Commented by

Arun Dev | Guide-Level 11

2012-02-19 09:46:11

@||Aneeket|| thanks inviting me!! Frederick Winslow Taylor He is regarded as the father of scientific management and was one of the first management consultants first introduced differential piece rate–a method of payment based on a standard rate of time and output. Which is similar to Variable P

Upvote

Commented by

Ankur Jindal | Contributor-Level 9

2012-02-18 23:05:10

Hi, Variable Pay is definitely need of the hour no doubt about that as it enhances employee productivity levels and may improve the stickiness with the organisation, a candidate is working in. However it needs to be delicately devised and implemented to suit employee needs and requirements. It shoul

Upvote

Commented by

Suryap2012 | Guide-Level 11

2012-02-18 19:24:06

I would like to request @||Govind_S|| to throw more light on this. Since he has work-experience in HR, his views would be very much valuable in enlightening our understanding.

Upvote

Commented by

Suryap2012 | Guide-Level 11

2012-02-18 19:19:24

Well I agree to the viewpoint that variable pay is good in the sense that it acts as a motivating factor for the employee to reach higher levels of performance, but there needs to be a proper structure of variable pay. Let me explain it with examples Company 1 pays a fixed of 12lakhs and variable o

Upvote

Commented by

Nikhlesh Mathur | Guide-Level 14

2012-02-18 18:11:05

Yes, Variable pay should become a way of paying the remuneration and the work systems should be linked adequately & correctly to the variable pay decided at the time of joining or negotiations or settlement. Variable pay does NOT mean cut in pay. It should mean extra payment with respect to output &

Upvote

Commented by

Aneeket Barua | Guide-Level 11

2012-02-18 17:01:24

Well my vote will go in favor of variable pay! Request @||Nikhlesh Mathur|| @||Gautam Joshi|| @||arun dev|| @||aru.chopra|| @||gopal sharma.|| @||varun.sharma|| @||Arvind Joshi245|| @||Suryap2012|| @||MANU KR||, MITTAL @||Manu Goyal|| @||Manmeet Kaur50173|| @||MSK70515|| @||Ankur Jindal 007|| @||Sh

Upvote