Variable Pay Programs—A Majority of Employers Still Have Them!

​Patty Goodwin, Surveys

 There are many kinds of variable pay programs–safety awards, attendance bonuses, year-end bonuses, lump sum payments, etc. Variable pay is any type of pay which is linked directly to an individual, team, or to organizational performance. MSEC has been surveying variable pay programs since 1975.

In our 2011 Miscellaneous Benefits/Pay Practices Survey, 80 percent of Colorado organizations had some type of incentive program for their employees.Those organizations not having an incentive program were comprised of 30 percent government employers and 17 percent manufacturing/nonmanufacturing companies. Bonus programs–any direct lump-sum payment given in addition to base salary–are the most prevalent, although the number of employers having these programs has decreased over the last seven years.

Displayed are comparison data for Colorado Front Range non-governmental organizations having bonus/incentive programs. The 2010 average annual bonus payout for clerical/tech and production/maintenance positions was six percent, for supervisory/professional positions it was nine percent, and top management received an average of 18 percent. The average annual bonus payout projected for 2011 for bonuses is five percent for clerical/tech and production/maintenance positions, eight percent
for supervisory/professional positions, and 16 percent for top management.



Other programs used by Colorado employers to create incentives for their employees are special monetary recognition awards (28 percent of Colorado organizations), one-time bonuses based on achievement of specific goals (21 percent), and Christmas gifts (18 percent).

Click here​ see the full display of data for the 2011 Miscellaneous Benefits/Pay Practices Survey.