REWARDING PERFORMANCE
Growing use of variable pay
Employers around the world have stepped up their use of variable pay in the last two years as companies recognise the value of tying pay to performance and results, according to research by Towers Perrin.
The study also found that successful multinational companies are sticking to a total approach to remuneration that includes cash, equity, benefits and perks.
Link to performance
Variable pay for HR directors ranged form 20% to 60% of total remuneration in most of the countries studied. What's more, variable pay as a share of total pay had increased in all countries for this position since the last survey in 2001-02.
Towers Perrin reckons that companies have also extended variable pay in a "more limited way to less senior-level positions, specifically to accountants and manufacturing workers".
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Title: Worldwide Total Remuneration 2003-04, Towers Perrin.
Methodology: The study examines compensation and benefits practices in 26 locations around the world. Specific information on total remuneration is shown for four positions: chief executive officer, director of human resources, a typical mid-level accountant and a manufacturing employee.
Availability: For all Towers Perrin publications visit www.towersperrin.com. A summary of the survey results is available free of charge in PDF format from the "Publications" section of the site.
Towers Perrin is a global professional services firm that "helps organisations around the world optimise performance through effective people, risk and financial management". The firm has served large organisations in both the private and public sectors for 70 years. Its clients include three-quarters of the world’ s 500 largest companies and three-quarters of the Fortune 1000 US companies. Towers Perrin has over 8,000 employees and 79 offices in 24 countries. To find out more visit www.towersperrin.com
Posted 19 February 2004