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The Latest Trends in Variable Pay

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7 Closing Thoughts Broad-based variable pay has burst onto the scene and has dramatically changed the landscape for how organizations approach pay for performance. With companies continuing to face intense competitive pressures, the current trend of minimizing fixed costs will not be reversed and the challenges of providing differentiated rewards through salary increases will be perpetuated. Organizations have been willing, and all indications are they will continue to grow the funding of variable costs since they are contingent on performance. The ability of these arrangements to capture employee focus and shape behaviors as well as provide the means to assess and reward performance at multiple levels makes them a valued management tool. Balancing the need to be in sync with organizational results and ability to pay with employees' abilities to influence outcomes will be a key ingredient to the success of these plans. And taking steps to ensure that a meaningful opportunity is available to contributors at all levels of the organization will ensure that productivity, quality and overall achievement are optimized. Editor's note: This is a guest contribution from Ken Abosch, Broad Based Compensation Marketing, Strategy & Development Leader for Aon Hewitt .

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