Variable compensation comes in a variety of forms, including profit-sharing, bonuses, vacation pay, deferred compensation, cash, and goods and services such as a company-paid trip or Thanksgiving turkey.
What is variable compensation?
Variable compensation is the portion of compensation that is determined by employee performance (usually a commission). … In sales, variable compensation is the portion of sales compensation that depends on employee performance. When employees meet their targets (i.e. quotas), variable compensation is paid in the form of a bonus, performance-related pay or commission.
What is a variable compensation plan?
Variable compensation is an incentive or bonus employers pay to employees whose performance meets or exceeds the company’s expectations, provided the company meets its own productivity and profitability goals.
Does overtime count as variable pay?
When non-exempt employees receive variable hour compensation, their overtime compensation is calculated weekly by dividing the compensation by the number of hours to arrive at the “regular rate”. Then they are paid at half the normal overtime rate.
What is an example of variable compensation?
Broadly speaking, variable compensation programs include annual incentives or bonuses, individual incentive plans, lump sum payments, technical achievement awards, cash profit-sharing plans, small group incentives, income sharing, and payments for new skills and knowledge.
How is the variable remuneration calculated?
Variable compensation is calculated in dollars or as a percentage. It is based on individual or business criteria, such as goals achieved or profits made. … Strictly speaking, hourly or piece-wage workers receive variable remuneration. 11
What is an example of variable compensation?
Broadly speaking, variable compensation programs include annual incentives or bonuses, individual incentive plans, lump sum payments, technical achievement awards, cash profit-sharing plans, small group incentives, income sharing, and payments for new skills and knowledge.
What are examples of variable payments?
Variable compensation comes in a variety of forms, including profit-sharing, bonuses, vacation pay, deferred compensation, cash, and goods and services such as a company-paid trip or Thanksgiving turkey.
What is variable compensation?
Variable compensation is the portion of compensation that is determined by employee performance (usually a commission). … In sales, variable compensation is the portion of sales compensation that depends on employee performance. When employees meet their targets (i.e. quotas), variable compensation is paid in the form of a bonus, performance-related pay or commission.
What are the goals of variable compensation plans?
A compensation plan that bases a portion of an employee’s compensation on an individual and/or organizational key performance indicator. What are examples of variable compensation programs? Piece wages, earnings- and performance-related compensation, bonuses, profit-sharing, incentive plans, stock options and employee participation.