← HR Metrics·Compensation & Benefits
Variable Pay Payout Amount
Final variable-pay (bonus) payout after applying the target, payout multiple, and cap.
How it’s computed
min(base_salary * target_fraction * payout_multiple, base_salary * target_fraction * cap_multiplier)
What the evidence shows
Evidence (effect sizes, priors, validity) is syncing from Principia.
Run it on your data
This metric is computed in the People Analytics Toolbox on your own numbers. See pricing — posted, no quotes.
sources: toolbox:metrics-catalog
What the literature says
The measurement literature behind this signal — sourced, so you can defend it.
“We have already established that in order to be considered meaningful and to drive behavior, an individual award generally should be targeted to be at least 8 percent of the employee’s annual base pay, or about one month’s pay. However, the significance of the award also should…”
— The Compensation Handbook (6th ed.)match 62%
“According to research conducted each year by Mercer, the percentage of U.S. employees eligible for variable pay has increased significantly since 2000, and the vast majority of organizations participating in Mercer’s 2014–2015 “U.S. Compensation Planning Survey” of more than…”
— The Compensation Handbook (6th ed.)match 61%
“In general, an amount equal to at least one month’s pay is considered sufficient to be meaningful to an employee and sufficient to attract his or her attention. More than half the organizations in Mercer’s survey use individual performance ratings as a factor in determining…”
— The Compensation Handbook (6th ed.)match 60%
Resources: The Compensation Handbook (6th ed.)