Hey experts,
Thanks for taking the time to read this.
Background:
I'm supporting an infrastructure company which is looking to decide upon a variable pay option for the level of AGMs and above.
Questions:
- What are the variable pay options (ideally those linked to performance) and which would you recommend for an infra company?
- What is the typical value of variable pay in terms of % of salary? (Eg.35-40% for x level)
- What is the weightage typically given to individual, team and organisational performances? (Eg. 50% to individual, 25% team and 25% organisational)
- What is the difference between variable pay and incentives? I thought incentives were a part of variable pay but i was told otherwise by the HRM.
Thanks in advance.
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Dear Mr. PawanRN,

Have you made any study on the Variable Pay - Performance plans or referred any books as such? If not then let me suggest you to start understanding about the Infrastructure companies, coz an HR should be sentient with the proletarian company (Infrastructure - at substantial growth) that he work's for.

A strategic tool/component used to retain the best of the employees is by providing a Variable Pay. Many Organizations use Variable pay as the percentage under the total compensation and had increased value in percentage (20-30%) depending on the employees when it comes to the performance. In India, the variable component is generally 15 to 25 per cent of the fixed salary; as the recent studies had ascertained that highest performers have been paid double the salaries and it had nothing to work out with the levels in the companies.

Every other company has its Variable Pay ranging on the outcome of business provided whereas, if the lower level employees are paid @ 10-12% in the similiar case the middle management by 13-16 % and the Senior management at 20-25%.

Business Today Attribution: Variable pay becomes the norm across sectors - Business Today - Business News

Variable payouts have been tweaking on a large-scale and they are paid individually where the company has no doubt in retaining employees with the benefits given as per the profit propotional to performance.

Variable pay and Incentives are tangled words. It confuses a lot ain't it? Well, Variable pay is given on the ability of the induvidual to motivate and retain more employees, however, Incentives at a larger space depends on the individual performance or their contribution.

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