Variable Pay Playbook

In a tight talent market where employees have choices about where they commit their time and talent, variable pay is frequently used as a retention, recruitment, and motivation tool. Payscale’s Compensation Best Practices Report (CBPR) reveals that 78 percent of organizations give some type of variable pay. At a time when increase budgets are tight, organizations are starting to shift their rewards towards variable pay over fixed costs (base salary). Doing so allows them to really shell out the cash for their highest performers, but only if they use the right kinds of variable pay.