Calendar of Events
Have a question to ask?
Subscribe for Updates
Photo and Video Gallery
Rate this page
Future of Europe
Which of the 5 scenarios proposed would you choose?
  • Carrying On
  • Nothing but the Single Market
  • Those Who Want More Do More
  • Doing Less More Efficiently
  • Doing Much More Together
Vote
Show Results
  • Creative Europe Project
    The Department of Haute-Loire is looking for three European partners to parti...
    25 August 2017
    read more...
    Europe Direct Valletta
  • White paper on the futur
    White paper on the future of Europe...
    27 July 2017
    read more...
    Europe Direct Valletta
  • The EU's response to the
    One of our student interns produced this well-written article about the ongoi...
    20 February 2017
    read more...
    Europe Direct Valletta
  • The importance of labour
    This article, written by a student at the University of Malta, passionately c...
    20 February 2017
    read more...
    Europe Direct Valletta
  • Strengthened EU-Swiss Re
    The EU enjoys very close relations with Switzerland in every sense: culturall...
    29 December 2016
    read more...
    Europe Direct Valletta
  • A boost for the European
    The European Commission is stepping up its efforts to develop a strong space ...
    26 October 2016
    read more...
    Europe Direct Valletta
  • EU increasing support fo
    The EU has announced that it shall implement new aid programmes in the Latin ...
    26 October 2016
    read more...
    Europe Direct Valletta
  • Commission proposes EU c
    Delivering on the Security Union: Commission proposes EU certification system...
    07 September 2016
    read more...
    Europe Direct Valletta
  • VAT Gap: Nearly €160 bil
    A staggering €159.5 billion in Value Added Tax revenues were lost across the ...
    06 September 2016
    read more...
    Europe Direct Valletta
  • Variable attitudes towar
    Performance-related pay and employee reward systems in Europe are often uneve...
    01 September 2016
    read more...
    Europe Direct Valletta
  • EU's 2017 budget: Parlia
    The EU's budget for next year will be decided over the coming months. Startin...
    30 August 2016
    read more...
    Europe Direct Valletta
  • Commission proposes 2018
    The Commission is also seeking to highlight the role of Europe's cultural her...
    30 August 2016
    read more...
    Europe Direct Valletta
< Back to News
Variable attitudes towards variable pay in Europe
01 September 2016

The use of supplementary employee reward systems has become a well-established practice in Europe. These are schemes used by companies to reward performance and motivate employees both as individuals and as a group. They are normally separate from basic salary and can be monetary or in-kind payments. The employees that benefit from these schemes often welcome them as a means to boost their income and as recognition of their performance. According to the European Company Survey, almost two-thirds of European establishments use at least one form of variable pay. The most common system, implemented by close to half of companies, is linked to individual performance according to management appraisal. Individual results-based pay and profit sharing is used in around one third of establishments, and pay based on team performance is also common. Share-ownership is not commonly used by European establishments.

These reward systems are more prevalent in the private sector than in the public sector, particularly in information and communications technology, finance and insurance, and consultancies. Larger companies are more likely to use reward systems than small and medium-sized enterprises, particularly multinational companies and companies located in economically advanced regions. There is also a higher presence of some form of supplementary employee reward systems in companies that foster employee involvement and autonomy, pay higher salaries and have a larger number of permanent and full-time staff.

Employer organisations in Europe are generally in favour of reward systems as they are seen to be powerful tools to increase employees’ motivation and to link salaries to a company’s performance. The approach of trade unions is more nuanced: they acknowledge the advantages for workers, but warn that that if these systems are not properly designed they can lead to inequalities as well as income instability. In some instances variable pay systems can be used as a way to assert managerial control in labour markets defined by lower fixed wages and high unemployment.

Supplementary employee reward systems are more or less a fixed characteristic of the European labour market, particularly in the private sector. Employers have a growing need for more flexibility, together with a desire to attract highly qualified personnel and financially motivate their workforce against a background of an ageing population, shortages of professionals, and a requirement for higher skills. Among employees, there is also increasing interest in supplementary pay systems on top of wages, especially among highly skilled and highly qualified workers. The use of these schemes is likely to increase in the future, particularly during a climate of economic recovery. In order for rewards and benefits systems to be more widely available and beneficial to the broader workforce, further work needs to be done by policymakers, employers and trade union organisations. 


  • Creative Europe Project ...
    The Department of Haute-Loire is looking for three European partners to parti...
    25 August 2017
    read more...
    Europe Direct Valletta
  • White paper on the futur...
    White paper on the future of Europe...
    27 July 2017
    read more...
    Europe Direct Valletta
  • The EU's response to the...
    One of our student interns produced this well-written article about the ongoi...
    20 February 2017
    read more...
    Europe Direct Valletta
  • The importance of labour...
    This article, written by a student at the University of Malta, passionately c...
    20 February 2017
    read more...
    Europe Direct Valletta
  • Strengthened EU-Swiss Re...
    The EU enjoys very close relations with Switzerland in every sense: culturall...
    29 December 2016
    read more...
    Europe Direct Valletta
  • A boost for the European...
    The European Commission is stepping up its efforts to develop a strong space ...
    26 October 2016
    read more...
    Europe Direct Valletta
  • EU increasing support fo...
    The EU has announced that it shall implement new aid programmes in the Latin ...
    26 October 2016
    read more...
    Europe Direct Valletta
  • Commission proposes EU c...
    Delivering on the Security Union: Commission proposes EU certification system...
    07 September 2016
    read more...
    Europe Direct Valletta
  • VAT Gap: Nearly €160 bil...
    A staggering €159.5 billion in Value Added Tax revenues were lost across the ...
    06 September 2016
    read more...
    Europe Direct Valletta
  • Variable attitudes towar...
    Performance-related pay and employee reward systems in Europe are often uneve...
    01 September 2016
    read more...
    Europe Direct Valletta
  • EU's 2017 budget: Parlia...
    The EU's budget for next year will be decided over the coming months. Startin...
    30 August 2016
    read more...
    Europe Direct Valletta
  • Commission proposes 2018...
    The Commission is also seeking to highlight the role of Europe's cultural her...
    30 August 2016
    read more...
    Europe Direct Valletta
Valletta
The EUROPE DIRECT network is one of the Commission’s main tools to offer information to citizens at local level and to gather citizens` feedback for the European Institutions. EDICs are a direct entry point to the Union for the citizens, offering general EU information, referring to specialised information sources, raising awareness and promoting debate.
read more...
Copyright © 2013 GRTU | Terms Of Use | Privacy Policy | Sitemap
Website By 
Co-funded by the European Union