Variable pay scheme Essay Example | Topics and Well Written Essays - 500 words

Variable pay scheme - Essay Example Mostly variable pay are given to specific individual or group only while the whole production and processing process involved different level of an organization. This may cause demotivation leading to negative performance. In order to ensure variable pay involves all levels of organization, overseers who are tasked with the assessing of performance should be trained on performance evaluation for the whole organization levels (Peck, 2007). Factors like salaries of different professionals in an organization should be considered before Variable pay is given. Different professionals in a company are paid salaries that vary from those of another profession. Professionals who are paid a lot of salary compared to their counter parts cannot be motivated or demotivated. This is because their value of salary is much more than their partners even when variable pay is added to them. Therefore in a company when comparing two professions e.g. the system engineers and sales person, there is little or no impact when one profession is rewarded because they are different (Hynes, 2002). The role of variable pay in organizations is to promote friendly completion among the workers. Competition in an organization will lead to good performance which will determine the employees variable pay. A steady competition will exist in an organization when employees are well motivated and have friendly environment. However, in some cases variable pay may lead to fierce competition which will cause tension and disrupt working relationship among colleagues. This mainly occurs when employees disclose their variable pay to colleagues. Organization can prevent fierce competition by enforcing strict policies that prohibits discussion of variable pay (Peck, 2007). The role of variable pay is ton enhance good performance in organization. Variable cost is a way of motivating workers to increase their