Rewarding individual employees through variable pay

Employee Recognition Employee Reward and Recognition Systems In a competitive business climate, more business owners are looking at improvements in quality while reducing costs.

Rewarding individual employees through variable pay

Rewarding Individual Employees Through Variable Pay Programs In deciding what to pay employees, and how to pay them, management must make some strategic decisions. Will the organization lead, match, or lag the market in pay? How will individual contributions be recognized? There are many ways to pay employees.

The process of initially setting pay levels entails balancing internal equity, the worth of the job to the organization, and external equity, the external competitiveness of an organization's pay relative to pay elsewhere in its industry. The best pay system pays the job what it is worth while also paying competitively relative to the labor market.

Some organizations prefer to be pay leaders by paying above the market, while some may lag the market because they cannot afford to pay market rates, or they are willing to bear the cost of paying below market.

Rewarding individual employees through variable pay

Pay is often the highest single operating cost of an organization, which means that paying too can make the organization's products or services too expensive. It's a strategic decision an organization must make, with clear trade-offs. Earnings therefore fluctuate up and down with the measure of performance.

Variable pay plans have long been used for compensating salespeople and executives. Recently they have begun to be applied to all employees. A number of organizations, business firms as well school districts and other government agencies, are moving away from paying people based solely on credentials or length of service and toward using variable pay programs.Essay title: Rewarding Individual Employees Through Variable Pay Programs In deciding what to pay employees, and how to pay them, management must make some strategic decisions/5(1).

A variable pay program is a pay plan that bases a portion of an employee's pay on some individual and/or organizational measure of performance. Earnings therefore fluctuate up. Rewarding performance through variable compensation—bonuses based on goal achievement—results in employees who are focused on adding value to the business by meeting and exceeding performance.

Rewarding individual employees through variable pay

a system in which workers participate in organizational decision making through a small group of representative employees.

Variable-Pay Program a pay plan that bases a portion of an employee's pay on some individual and/or organizational measure of performance. Rewarding Individual employees through Variable-Pay Programs is becoming more evident in the work place. A number of organizations are moving away from paying solely on credentials or length of service.

Employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels.

Rewarding Individual Employees Through Variable Pay Programs - Essay