Employee Incentives

Variable Pay is on the rise

The financial crash and Government austerity drive, in the context of press criticism of high, incentive-driven pay levels, do not on the face of it present a favourable environment for bonus and incentive plans. However, our research demonstrates that variable pay is here to stay, and its application is expanding rather than on the retreat.

As bonus payments start to recover, employers need to avoid the commonly reported issues with plans, including payments coming to be regarded as a fixed entitlement, over-complexity in design, and disenfranchised employees feeling unable to impact on the plan measures.

Solutions that deliver real impact

Our experienced consultants work with clients to diagnose the context for the operation of bonus and incentive plans and then support them in designing and delivering the most effective arrangements. Three factors are critical to leveraging the potentially positive effects of bonus plans on your organisation's performance:

• Strategic alignment and clear objectives
• Well-engineered design and appropriate performance metrics
• World class performance management and employee engagement processes.

Whatever the setting and employee population – be it all employee bonus plans, executive incentives, sales compensation or call centre rewards – we have the information, tools and experience to guide you so as to apply these general principles to match your own unique goals and culture.

Market data leader

Conducted for 15 years, Aon Hewitt’s Variable Compensation Measurement™ Survey focuses on local broad-based variable pay programmes, or global programmes implemented at subsidiary level.

Aon Hewitt’s VCM™ Survey is the only annual broad-based study capturing plan characteristics for cash variable pay and special recognition awards. Areas evaluated include: plan objectives, plan eligibility, funding and design and plan effectiveness.

Items reported

The full VCM™ report delivered in July contains reports summarising each major aspect of the plan or programme in tables, graphs and charts. Where appropriate, 75th percentile, average, median, and 25th percentile responses are provided.

To discuss participation or purchasing data from Aon Hewitt’s Variable Compensation Measurement™ Survey or related products and services, please call +44(0) 1727 888 404 or email [email protected]

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