Abstract:

Practice shows increased use of variable compensation in all advanced economies. Variable compensation has several empirically proven benefits for the company, but in order for these to occur employees must accept variable forms of compensation. Preference for variable pay can be moderated by numerous individual or organization related variables, including also features of national culture. Reward systems in Croatia have been traditionally based on the equality principle. Based on the Delphi research performed among human resource management experts, this paper examines the attitudes towards variable pay in Croatia. Research results indicate that after two rounds of research experts did not reach a full consensus on the attitudes towards variable pay among Croatian employees. A consensus has been reached about the following issues: variable compensation is well accepted by sales personnel and should amount to up to 50% of total pay, employees more easily accept variable compensation in case they have a relatively high fixed base salary and in case they perceive that the performance appraisal system is fair.