Why do companies implement variable pay plans?
Increasingly, organizations are seeking pay plans that align employee results with the results of the organization. Variable pay plays are one option to enhance compensation and attract and retain the talent an organizations needs. Typically a variable pay plan shifts a portion of an employee’s compensation costs from fixed to variable. This allows organizations to align compensation expenses with their ability to pay. In essence, the organization shares success and risk with employees.
Utilizing compensation as an incentive encourages improved position performance and motivates employees to develop their potential abilities. A flexible pay program reflects changing economic and competitive conditions and allows for changes within an organization.
Other benefits of variable plans include the ability to reinforce organization value and teamwork. Motivational factors are another important factor. Variable plans can inspire and encourage behavior changes to support an organization’s goals.
MRA’s compensation professionals lend their expertise to help your organization identify objectives, cultural readiness, ability to pay, and funding options while developing clear communication plans. We’ll work with your organization to design the following kinds of plans:
- Spot or Special Recognition Bonuses
- Sales plans
- Business Incentives
- Team based Awards
- Gain Sharing or Productivity awards
- Profit sharing plans
MRA’s Compensation professionals have extensive experience to assist you to develop a variable compensation plan that delivers the results you want to achieve.