Variable pay packages for employees on rise

NEW DELH: An intensifying competition for the right talent has resulted in changing human resources practices, with most firms opting for variable pay packages to reward their employees.

"There are well-defined metrics for variable pay packages reflecting transparency and fairness in carrying out the whole process. There is a clear increase in variable pay as part of compensation mix," said Jeff Fuller who is the Country Head of Human Capital at Mercer Consulting.

In most of the companies, variable pay part is based on individual performance of employees.

He was speaking at a conference on "Executive Remuneration and Employee Attraction and Retention" organised by the American Chamber of Commerce (AMCHAM) India, here today.

Pointing out that there is a perceptible increase in use of cash-based retention programmes, Jeff Fuller added that most of the employees are being offered "choice pay packages".

He also noted that as part of retention initiatives, companies are offering special stock options scheme for key managerial personnel apart from fancy designations to employees.

According to him, hikes in salaries for employees would stay in double digits even as compensation differentials would be based on performance levels. However, attrition rates would continue to remain high on account of increasing opportunities in the emerging markets, he said.