In today’s economy where salary and wage increases are minimal and benefits are being scrutinized, variable pay or pay for performance has once again surfaced as means to provide incentive to employees. Salary forecasts as projected by various services; such as, Towers Watson, Mercer, Hay Group, indicate that 2012 will again bring pay increases around 3% to most workers. With requirements for the Patient Protection and Affordable Care act continuing to come into effect and the cost of health care rising more sharply than the rate of inflation, employers struggle to come up with ways to effectively reward good workers. When they do decide on additional pay as a way to reward these workers, set up within their system can prove challenging. While setting up additional pay codes for this additional pay is one option, with Microsoft Dynamics® GP Advanced Payroll, the organization is also able to “add-on” amounts at the employee, pay code, company, department, position or shift code levels. The Payroll module will adjust the wage according to the criteria defined during the payroll transaction entry. This can be defined for the organization or, if needed, can be defined on an exception basis at the employee level. The only restriction is that it is for hourly pay codes only. Another tool that can assist you during these tough economic times is the Compensation Management Utility which allows you to see the impact of making adjustments (percentage or amount) based on division, department, position or pay code. The Paycheck “What If” Calculator from Integrity Data® can help you guide employees as they make decisions regarding taxes and benefits by showing them the impact of their decisions. Finally, there is the ability to produce a Total Compensation report for each employee from the Benefit and Deduction Summary window which enables you to define and communicate an employee’s total compensation. In conclusion, Microsoft Dynamics® GP Human Resources and Payroll modules offer various tools to assist organizations with variable pay situations. When all costs are being scrutinized, the time is right to take advantage of existing functionality and sometimes even additional features to provide increased communications and opportunities for employees in a more efficient manner.