Compensation systems have shifted from traditional entitlement-based increases to modern performance-driven gains. Traditionally, pay was 100% base salary but now variable components have been added. Incentive and bonus plans were once restricted to executives but are now extended throughout many organizations.

1. Changing Compensation Systems
Traditional Modern
Entitlement-base
increases
Performance-driven
gains
Pay = 100% base
salary
Variable component
added
Few incentive/bonus
plans, restricted to
executives
Many kinds of plans,
extended throughout
the organization