Compensation in the Manufacturing Sector: Managerial Variable Pay and Benefits Schemes in an Indian Steel Company

Abstract

This article examines the use of variable pay and benefits in a large steel manufacturing company in India. This study finds that the use of contingent and performance-based bonuses has increased. The increase can be explained by the growing internationalization of product markets and the resulting increase in competition. This is a multinational company with a high percentage of foreign sales and with a strong orientation toward making itself an employer of choice. The trend is toward decentralization and flexibility in the remuneration system. This article also investigates the importance of restructuring that took place in the steel company during 2004 to 2005.