Managing Successful Variable Pay Plan

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For a variable pay plan to be successful, the following factors are important:

  • There should be enough financial resources available to kick start and sustain the variable pay plan.
  • The variable pay plan needs to be consistent with the prevailing organizational culture (Belcher 232).
  • It is important to ensure that there is a clear demarcation between, on the one hand, an organizations base pay and on the other hand, the available payment plans.
  • The management of an organization needs to ensure that the variable pay plans have been communicated to all employees within the organization.
  • There is a need to ensure that an organizations performance results are tied to the actual payouts given to the employees.
  • There should be current, updated plans, to supplement the variable pay plans.
  • The variable pay plans should lend themselves to measurable performance.
  • It is important to ensure that the variable pay plans contain coherent and understandable plan details.
  • The management needs to ensure that the variable pay plans translate into the desired behaviors.
  • The variable pay plans need to be tied to the organizational objectives.

Works Cited

Aidt, Toke, and Tzannatos, Zafikirs. Unions and Collective Bargaining. Economic Effects in a Global Environment. Washington, D. C.: The World Bank, 2008. Print.

Belcher, John. How to design & implement a results-oriented variable pay system. New York: AMACOM, 1996. Print.

Martin, Edward. Labor-Management Relations, Collective Bargaining, and the Public Sector: Collaborative Solutions in Alameda, California. Public Administration & Management: An Interactive Journal, 8.2(2003): 54-68.

Mathis, Robert, and Jackson, John. Human Resource Management (Eleventh Edition). Ontario: Thompson business & Professional Publishing, 2005. Print.

Rappaport, Anna. The Future of Retirement Benefits in the U.S.Employer Policy, Benefits and an Older Population. N. d. Web.

Romanoff, Kent., Boehm, Ken and Benson, Edward. Pay Equity: Internal and External Considerations. N. d. Web.

Stanton, Mark. Reducing Costs in the Health Care System: Learning From What Has Been Done. Research in Action, 9.2(2002): 2-11.

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