Chapter 5

Organization-wide ­Variable Pay

The Missing Link in Managing the ­Value Chain

Key Points

The role of identity economics in establishing ­organization-wide variable pay

Integrating identity economics with the expectancy model of motivation

The chain reaction and reinforcement dynamic of ­organization-wide variable pay

The self-financing nature of variable compensation

Some existing models of variable compensation

A recommended model based on simplicity, a culture of ­collaboration, and management commitment

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