“Variable Pay” All the Rage Even in Nonprofits?

November 6, 2012; Source: Washington Post

The Washington Post reports that employers are awarding more bonuses and performance-based pay rather than pay increases in order to “incentivize workers.” Apparently, human resource experts (don’t you just love them) say that this is popular because it allows more flexibility and creates lower fixed costs. Bonuses and performance-based pay are grouped in a category of “variable pay” and, according to a study from nonprofit research firm WorldAtWork, the practices were used by 82 percent of employers this year as compared to 79 percent last year. Another survey by Aon Hewitt indicates that, this year, companies directed 12 percent of their payroll budgets to variable pay and only three percent to salary increases.

I am unsure how much weight to give to this report and I could voice an opinion here but I wonder what you nonprofit workers think of this trend? Is it fair? Do you find it more in use over time? Let us know what you think. –Ruth McCambridge