Hr News

Variable Pay Is Becoming More Common and More Frequent

Source |  |  BY:Cassie Sanchez, Content Marketing Manager at PayScale. 


A rich compensation mix encompasses much more than base pay alone, there are bonuses, incentives, benefits and much more to consider. Together, all these pay elements create a total rewards package for employees.

However, variable pay can also be a powerful manifestation of company culture. For example, why not offer spot bonuses for individuals who show strong examples of the company’s core values? If an organization prioritizes collaboration, why not give a bonus to the individual who stayed late helping a coworker finish a project? If risk-taking is a core tenant, an employer could turn heads by rewarding a failed project, simply because an individual was bold enough to try something new.

Variable pay includes a number of different programs including individual incentive bonus, team bonus, year-end bonus, hiring bonus commissions, retention bonus and project bonus. PayScale’s 2017 Compensation Best Practices Report examined the practice of paying bonuses and found the prevalence has increased over time. This year’s data shows variable pay continues to be a prominent component in the modern compensation landscape. Approximately 74% of all organizations surveyed said they offer some type of variable pay to employees. That number is even higher among top-performing companies — who are more likely to incorporate variable pay in their compensation strategies (82% versus 73% of typical companies). The research also shows that the larger the company, the more likely it is to provide variable pay. In fact, 85% of enterprise companies offer variable pay, versus 69% of small companies.


Show More

Related Articles

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Back to top button
%d bloggers like this: