Transcription of Chapter 5: Variable pay - VdW
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Chapter 5: Variable pay - VdW
Chapter 5: Variable pay The real purpose of any Variable pay, incentive or bonus scheme must be clear. The organisation must have a clear idea as to its value. The motive for Variable pay should be retention or some similar aim. It is not the ideal tool to increase business performance, because people are inclined to start viewing Variable pay as a right and to balk at accepting less in a subsequent year. The value-add of Variable pay schemes must be assessed and people must be sensitised to the business case for the scheme. Care must be taken not to create perverse incentives. Variable pay should motivate and engage employees. There may be different approaches to Variable pay. The organisation's approach to this issue should be made clear in the reward strategy, whether bonuses can be paid out or some pay is at risk.
1 Chapter 5: Variable pay The real purpose of any variable pay, incentive or bonus scheme must be clear. The organisation must have a clear idea as to its
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