How are Organisations balancing fixed vs. variable pay to drive employee motivation?
HK Organisations need to balance between fixed and variable pay as both play crucial roles in employee motivation. Many organisations tend to keep fixed pay for roles that are stable and variable pay for roles that are more achievement-oriented.
Variable pay is aligned to the motivational needs of an employee like top management has a higher amount of variable pay vs middle management employees as top management is more risk takers and motivated by pay for performance.
Variable pay allows organisations to manage their financial liabilities more flexibly. As variable pay is dependent on performance, it can scale with the company’s performance, which makes it more sustainable, especially during challenging times.
Many organisations are shifting towards compensation plans that have a higher proportion of variable pay, especially in sales or senior leadership roles. This allows employees to earn more based on their efforts, aligning...
