Yes to Variable Pay, but in Moderation
Benefits of such forms of compensation
Despite job losses and pay cuts related to the global financial crisis, executives in certain sectors, such as banking, are still earning astronomical salaries. This highlights the difficulty of designing fair and effective variable remuneration systems.
Even so, IESE Professor Josep M. Rosanas defends the benefits of such forms of compensation, provided the compensation is not too high.
Linking pay to performance is often criticized for making money the overriding motivator.