Performance, pay & rewards · Core

Variable pay

Also called: incentive pay

ELI5

Compensation dependent on performance, results or conditions.

Used in conversation

“The announcement should not get ahead of the agreed process for variable pay.”

Pitch context

You will see “Variable pay” in organisation plans, workforce reviews, change programmes and people reports when the discussion reaches performance, pay & rewards.

Why it matters: In performance, pay & rewards, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

Variable compensationThe search label “incentive pay” can route to both entries.

Sources & evidence · 2

Direct term-level sources and supporting source families.

U.S. Bureau of Labor Statistics — BLS GlossaryDirect source · primary · checked 2026-08-16
OECD — G20/OECD Principles of Corporate Governance 2023Direct source · institutional · checked 2026-08-16