Variable Compensation Concepts
Nowadays, variable compensation systems are part of the daily routine in most companies. The aim here is to consistently orient the individual employee or the team to certain measurable or evaluable criteria for the company, the organisational unit or oneself and/or the team.
In this context, the trend towards variabilisation of compensation is continuing to rise. Studies conducted by Baumgartner & Partner indicate that 70 % of all companies would like to make personnel costs more flexible. Of course, on one hand, this affects new organisational and working-hours models – but also the direct conversion of fixed compensation to variable compensation. The following types of compensation typically are made more flexible:
- Extra pay/bonuses which exceed the agreed tariff
- 13th/14th monthly salary
- Any type of vested rights
- Overtime (performance output instead of hours input)
- Other fixed payments
Baumgartner & Partner will assist you in extending your base-salary conception to include a variable component, or make fixed compensation elements more flexible. After all, only an individually-adjusted variable compensation concept will enable you to compensate your employees in a manner comparable to their level of performance and success.