at-risk pay

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Is that proportion of remuneration which is contingent on a measure of employee, workgroup, or organizational performance and which has to be ‘re-earned’ in each pay period. At-risk pay is also known as variable pay and there has been a shift in the management of pay in recent years towards reliance on this kind of reward. Companies have been advised by pay consultants to reduce the proportion of consolidated base pay within total remuneration and expand that which is at risk, in order to maximize management control over worker behaviour. Examples of at-risk pay include annual profit-share, sales commission, and performance bonuses which take the form of a one-off non-consolidated cash payment.

Subjects: Human Resource Management.

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