You may well ask whether a company should even devote sufficient resource and time to the subject of employee motivation and commitment? Well, we believe the answer is a resounding 'yes', since motivation helps to explain a number of fundamental principles that govern human behaviour inside and outside the workplace:

• Firstly, it is the process by which every individual initiates action.
• Satisfying our desires is the driving force behind all our actions and yet……when we fulfill our desires our motivation to achieve them is reinforced, not removed.
• Performance-related compensation offers a reward in return for results that are achieved through effort: participation in a performance-related pay scheme helps to develop an employee's ability to weigh up the pros and cons of expending such effort and this directly influences motivation.
• A persistent gap between desire and satisfaction gradually leads to demotivation.

In this context, a variable compensation policy enables a company to articulate certain core principles and objectives and convey to its employees the motivational outcomes it must achieve in order to fulfill them.