Best Practices in HCM White Paper
Today’s market leaders are developing performance-driven rewards programs to recruit and retain top-notch employees. They use variable pay mechanisms to match business performance with employee performance as part of a “total rewards” program. Stock options, advanced degree programs, vacation time, and periodic bonuses all play a role in this variable or “differentiated” compensation plan.
Variable compensation programs blend monetary and non-monetary rewards based on the needs of each segment of the workforce. Employees participate in corporate success. When a company has lower-than-expected profits, variable compensation budgets are reduced. When the company’s profits exceed targets, the bonus pool grows and employees reap the benefits.
