Variable pay is any plan that ties pay to productivity or profitability, usually as one-time lump payments. It is usually an incentive plan that ties a group or teams pay to some measure of the firm’s (or the facility’s) overall profitability: profit-sharing plans are one example. However, confusing as it may be, some experts do use the term “variable pay” to include incentive plans for individual employees.
Variable Pay means any plan that ties pay to productivity or profitability, usually as one-time lump payments.