Variable Relational Compensation Strategy in Organizations

What is a variable relational compensation strategy?

1. A compensation strategy that combines short-term rewards with long-term incentives
2. A compensation strategy that only provides immediate rewards to top performers
3. A compensation strategy that offers retirement programs for all employees

Answer:

1. A compensation strategy that combines short-term rewards with long-term incentives

An organization using variable relational compensation provides top performers immediate rewards and also offers long-term incentives such as a retirement program to retain workers.

Variable relational compensation refers to a compensation strategy that combines short-term rewards with long-term incentives to motivate and retain employees. In this approach, top performers are recognized and rewarded promptly for their exceptional performance through immediate rewards such as bonuses, commissions, or performance-based incentives.

Additionally, the organization recognizes the importance of retaining talented employees over the long term and offers them attractive benefits beyond immediate rewards. This can include long-term incentives like retirement programs, stock options, profit-sharing plans, or other forms of deferred compensation that provide financial security and encourage loyalty and commitment among employees.