The perspectives of variable pay in Croatia

Variable pay can have numerous benefits for the employee and the employer, however, the overall effect of variable pay will depend upon employee attitudes and preferences towards such form of compensation. Considering that reward systems in Croatia traditionally used the equality principle, the objective of this paper is to examine the role of variable pay from both employee and employer perspectives. Research results are based on a Delphi research of employee attitudes about variable pay and empirical investigation of actual employers’ variable pay practices. The Delphi study results indicate a lack of consensus about employees’ preferences for variable pay in Croatia. However, practice shows that some form of individual variable pay has been adopted by most examined companies. There is some gap between preferences for variable pay and actual compensation practices so this paper identifies conditions under which acceptance of variable pay can be improved.