The study also found that companies in sectors such as oil and gas, services, natural resources and chemicals are more aggressive in offering a larger variable component in an individual's pay. Sectors such as transportation and construction are still conservative and prefer a lower percentage of variable component.
Companies in infrastructure, real estate and IT sectors are unlikely to reward their performers with similar incentives as last year, although some sectors like health and life sciences and consumer goods seem to fare better, the survey has found.
"The study found 'the creation of a pay-for-performance ethos' to be the number one priority amongst companies while putting a variable pay policy in place," said Amer Haleem, country manager, productised services, Hay Group India. The most commonly cited reason for modifying a company's existing variable pay plan was a change in business circumstances, pointing to the increasing trend of pay and rewards being treated as a business decision rather than only the domain of compensation experts, he added.
The survey also found that attrition was 13.6% over the last 12 months, implying a conservative trend in hiring and exits.