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 enhances compensation structure to attract and retain talent. 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 results. In essence, the organization shares success and risk with employees.
Using variable pay as an incentive encourages improved performance and motivates employees to develop their potential abilities. A flexible pay program allows organizations to adapt to changing economic and competitive conditions.
Other benefits of variable pay plans include the ability to reinforce teamwork and 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 you to design a plan for your organization:
- 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.