The end of the pay freeze for DOE contractors and increasing use of variable pay in the commercial marketplace provide an opportunity to implement variable pay programs as cost effective compensation management approaches for improving market competitiveness of contractor pay practices. Variable pay programs tied to performance can also support the Department's emphasis on performance based contracting. Additional guidance is provided annually by the Director, Office of Contract and Resource Management. It provides contractors pay delivery options to remain competitive in attracting, retaining, motivating and rewarding skilled employees. Variable pay is normally associated with achieving desired performance and significant accomplishments.
Variable pay provides the option of reinforcing the concept of salary management.
Use of variable pay recognizes that base pay alone may not be competitive with practices of companies comparable to DOE contractors. Promote the infusion of best practices and innovations into contractor compensation management programs. Support the Department's emphasis on performance based contracting. Facilitate accomplishment of DOE missions. Variable pay should be affordable and justified within the constraints of the overall operating budget.