Strategic Compensation Plan : Rebalancing Fixed and Variable Pay

This paper aims to investigate the relationship between fixed and variable pay compensation in the organizations and their impact on employee motivation, productivity and overall performance of the organization. Impact of fixed pay and variable pay as a part of overall compensation structure on the performance of organization is not explored adequately by researchers. Hence, this paper reviews various components of compensation plan and provides a framework which shows the importance of rebalancing fixed pay and variable pay in strategic compensation management. The paper supports the importance of rebalancing components of compensation plan to gain competitive advantages