What is variable remuneration? Is it worth applying?

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Variable pay tends to increase employee motivation, as it is a financial addition to the regular salary. It has a direct impact on how employees feel about working in the organization. And it can be a competitive advantage over other offers on the market.

Variable remuneration emerged at the beginning of the 20th century, when factories gave bonuses for productivity or made payment per piece. This payment was made on the assembly lines, in the Fordist production model.

Today, variable compensation is still used as an california realtors email list strategy. But is this bonus still effective, that is, does it really help to improve employee performance and strengthen their engagement with the company?

Find out in this article what variable remuneration is, how it is adopted in companies and whether or not it is worth including it in your reality. Let's go!

What you will see in this article:


Types of remuneration and their differences
Are there any regulations for applying variable remuneration?
What are the advantages of adopting variable remuneration?
Profit Sharing and Results (PLR)
Is it worth adopting Variable Remuneration?
Care when implementing variable remuneration
How to calculate variable remuneration?
Types of remuneration and their differences

There are basically two types of remuneration, fixed and variable.

Fixed remuneration
Fixed remuneration is the total amount deposited into the employee's account. It includes salary (paid according to services rendered) and additional payments such as night shift, hazardous work, overtime, etc.

Offering a salary and some benefits are obligations that every employer must fulfill. However, to attract talent, motivate the team and strengthen the bond between employees and the company, many provide additional value to their employees. This is why variable compensation exists.