Get set for more variable pay

Waiting for a hike in your pay cheque???

Your annual increment this year may not be a guaranteed hike as most of the salary increase is likely to come in your overall cost to company's (CTC) variable components. To beat the economic slowdown and keep wage bills under check, Indian firms are gradually moving more towards raising variable pay in compensation packages, say human resource experts. The variation can depend on an individual's performance or a company's overall performance - or both. With high interest rates and slower sales biting them, most companies are looking at ways to keep costs in control. According to a research conducted by global human resource firm, 85% of the 410 Indian companies that it surveyed in 2012 said they had introduced a short-term variable pay component. Earlier, variable components including hefty bonuses comprising 7-30% of the total CTC was primarily meant for senior managers. Now, this is being increasingly extended to middle and junior levels. A HR consulting firm surveyed 734 firms across the country and suggested that employers are considering a "total rewards approach" - under which salary packages may be linked to actual performance.