Bonus Assignment 1

Variable Pay

Introduction
Variable pay is used to recognize and reward employee contributions to the company's success One of the key components of this variable pay plan is the strategy of linking pay to performance The variable pay would be paid out as a percentage of the whole subject to the performance of the employee

 The idea behind variable pay is that it provides an incentive for

employees to feel a sense of ownership and take responsibility for their jobs as well and relate to the overall division and company

By introducing variable pay, the management would ensure that employees are motivated to contribute individually and as a unit and a division and finally as part of the whole company

Variable Pay
Variable Pay

Sales (Target Based)

Compliances

(50%)
Monthly

(50%)
Annually

Calculation
Eg: Variable Pay(Annually)= Rs. 10,000

Sales(50%) = Rs. 5000

i.e. 416.666 monthly.

Compliances(50%) = Rs. 5000

Compliances amount is given only on the fulfillment of compliances of an organization as per the statutory norms. This amount is paid in lump sum at the end of the year