Encyclopedia of Variable Compensation Components

Variable compensation is built from parts that get mixed up in everyday use. Premium, bonus, commission and performance allowance are not synonyms. They refer to different figures, are settled on different cycles and, in case of doubt, sit under different legal rules. This encyclopedia explains the common compensation components one by one and draws the lines between them.

Next to them are the pay components that come on top of base salary without being tied to performance, holiday pay for instance. And the goal types that make a variable share calculable in the first place: quantitative and qualitative goals, project, team and corporate goals, plus the personal performance evaluation.

Every entry covers what the term means, where it shows up in practice and how the amount is worked out. Anyone setting up or reworking a compensation model will find the terms that actually get argued about in the business.

Types of Compensation

Compensation Systems

Types of Goals

About the Encyclopedia of Compensation Components

This encyclopedia contains collected knowledge about various compensation topics with a focus on all types of variable compensation components.
If you are interested in this topic, please feel free to contact us. We look forward to discussions with interested parties and like-minded individuals!