Join Compensation.Exchange to ask a question of the Community or to participate in a Discussion.
I've come across differing ways of positioning/communicating Variable/Incentive pay.
This is either as a percentage of Base Salary or a percentage of Total Compensation.
In my experience the approach to this depends on whether the audience is the Sales community or not. Sales people often refer to their on-target incentive/commission amount as a percentage of their total compensation. On the other hand, non-sales people, who more commonly would have some kind of bonus plan as part of their compensation package, would think of this as a percentage of their base salary.
In a small company such as mine, we have taken the approach that we communicate any kind of variable salary/bonus/incentive pay/sales commission as a percentage of Base Salary. It seems to me to be easier to communicate, understand and administer.
I would be interested to know how others in the Compensation Exchange community approach this and whether there is a common language.
Many thanks in advance,