In order to more closely link pay to performance and increase the variability of pay discretionary bonuses, profit sharing schemes and incentives should be used to reward employees.

Question

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By implementing bonuses or profit-sharing schemes, employers can align the financial interests of employees with the success of the company. This encourages employees to work harder and perform better, knowing that their efforts will directly affect their compensation. Therefore, pay becomes more closely linked to performance and can increase in variability.

In Order to More Closely Link Pay to Performance and Increase