A variable pay or a bonus is the most common part of the motivation of employees. Many companies do believe in the motivational role of variable pay. But is it really truth?
The companies believe the higher proportion of variable pay to the base salaries, the more the employees will be motivated to reach higher goals and better sales volumes. But this kind of motivation works just in the years of good and excellent sales volumes.
Some companies set very aggressive proportion of base salary and variable pay, which can work in times of excellent sales results and booming net income of the whole company. In the moment, when the sales volumes are stable, the employee can be stressed by the decreasing personal salary and total cash.
The variable pay for employees has to be a “nice extra”, but the company cannot make all the employees depend on the variable part of the salary to survive. It will be the company, who will loose the war - the employees will leave immediately. When their income will get smaller and smaller.
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