How to Introduce Variable Pay in a Small IT Company: Seeking Advice on Best Practices

I am working with an IT company with around 50 employees. We have a very flat structure for salary breakup like Basic+DA, Medical Allowance, Conveyance, HRA, and Personal allowance. Now we want to introduce the Variable pay component in this structure. I have the following queries to understand the same:

1) Is variable pay apart from CTC, or can it be put as a salary component (CTC)?
2) How can that be defined?
3) What is the % of the same?
4) Do we need to pay it monthly/quarterly/annually?
5) How much is the minimum amount we need to pay monthly/quarterly/annually?
6) Any other information I should know before introducing the same.

Please help me by giving your valuable feedback. You can revert to my email [Email Removed For Privacy Reasons].

Thanks and regards

I am working in a Retail Organization (sales-driven org) with limited manpower strength. We are looking at introducing a variable pay as part of the CTC component to meet the following objectives: to gain confidence in their ability and then increase the VP as per their performance (gain sharing) and to encourage an entrepreneurial approach in their work and help them stay focused.

Guidance on Communicating Variable Pay Changes

Please guide me on how to communicate this change to the employees. If anyone can share a PowerPoint presentation or provide a few points on this, it would be greatly appreciated.

Thanks & regards,
Shilpa.