Survey sees strong trend of performance-linked pay

For top management, the variable pay as a proportion of total pay has gone up from 16.5 per cent in 2002 to 18.8 per cent this year. This is projected to go up to 21.2 per cent in 2004.

The increase has taken place for five job categories, i.e. top management, manager, professional or technical, clerical and support and manual workers.

The survey covered 92 organisations spread across eight industries. "As corporate revenues and budgets stagnate, and as talent attraction and retention pressures continue to increase, organisations are considering diverting a higher proportion of the kitty towards rewarding critical talent through 'variable pay' to drive business results," Nishchae Suri, Hewitt's India business consulting leader, said.

"Our findings suggest that the variable component in the total pay has shown an year-on-year increase, more and more companies are going for it and the coverage of the practice over all employee levels within an organisation has been increasing," he added.

"Our findings suggest that the variable component in the total pay has shown an year-on-year increase, more and more companies are going for it and the coverage of the practice over all employee levels within an organisation has been increasing," he added.

The highest level of variable pay is still paid in Australia, where employees in the top management category receive almost 28 per cent of their total compensation in variable pay.

The practice was also strong in Singapore and the Philippines where the top management received variable pay at rates of almost 25 and 21 per cent, respectively, the study "" which covered the Asia Pacific region "" said.

The increase in the variable pay component over the last year for other employee groups ranges from 0.6 per cent to 2.3 per cent.

The study shows that there are stronger performance management systems in place to ensure an increasing alignment of salary with performance.

Salary scheme

For top management, the variable pay as a proportion of total pay has gone up from 16.5 per cent in 2002 to 18.8 per cent this year

The highest level of variable pay is still paid in Australia, where employees in the top management category receive almost 28 per cent of their total compensation in variable pay

In Singapore and the Philippines the figure is 25 per cent and 21 per cent, respectively