The big shift from salaries to bonus-based pay
More Americans are in jobs where a chunk of their pay isn’t guaranteed.
In incentive pay programs, base salaries are often fleshed out with monthly or quarterly bonuses conditional on hitting certain targets. Twenty-eight percent of more than 300 companies surveyed said they were building incentive pay into new roles, according to a 2024 survey by revenue-management consulting firm Alexander Group.
The practice has long been common for salespeople and top brass. Yet apart from the yearly raise—and for some, an annual bonus—the vast majority of the workforce makes the same amount every payday.
Now, more companies are trying to get the most out of rising payroll costs by making a part of workers’ pay contingent on completing prescribed goals.
Employers say the new way to pay professionals from accountants and human-resource managers to marketing assistants can fuel greater productivity. Plenty of overachievers say they are relishing the often-rich upside potential. Yet some workers say they are making less than they bargained for.
“There’s absolutely risk, but in my experience there’s been more reward," says Hannah Brown, 32, a chief of staff at business-software company WalkMe.
She is eligible every quarter for a target bonus of 11% of her salary, half of which depends on her department’s performance and individual goals she sets with her boss ahead of time.
Jobs close to the sales process, such as marketing and after-sales support, are the most likely to be swept up into pay-for-performance plans. But some firms, such as WalkMe, are using short-term bonuses to shape pay for everyone from accountants to human-resources managers.
Whether a worker supports more incentive-based pay often comes down to how the compensation is
Read more on livemint.com
