A Systematic Approach to Developing a Variable Compensation Plan

This 8-page research report written for upper management features recent trends in employment compensation. Using a surfing analogy to break down the variable plan process, the report presents the key characteristics of a variable pay plan as well as the steps for designing one. The authors also cover key elements, such as attainable goals and effective teams, for a variable incentive program to be successful. Shortcomings of other employee compensation programs and the long-term benefits of a variable compensation plan are also evaluated.

Other topics include:

• cross functional teams
• measuring, tracking, and communicating performance results
• communication
• compensation components
• benefits and stock options
• variable cash incentive plans
• health care costs
• corporate scandals
• stock option expensing
• stock dilution
• a flat stock market

This Executive Report is written by Thomas J. Lynch, Vice President of Compensation, Ceridian
Tom Sopcyzk, Senior Compensation Consultant, Ceridian

About Executive Reports:

Executive Reports offer focused, hard-hitting advice from the leaders of some of America's top companies, packaged in a concise, readable format. Each research report provides readers with 3 to 5 strategies that will have a direct financial impact on their business. While not meant as a comprehensive guide, each report includes quick-hit items that can immediately impact specific business strategies. Executive authors drill down to the central issues surrounding each topic area and dispense expert advice in concise, direct language. Executive Reports feature leading professionals selected by the Aspatore Editorial Board based on their experience, research, and standing within the professional community.