ISSUES IN DELIVERY OPERATIONS – CAN VARIABLE PAY SCHEMES REALLY WORK?
ISSUES IN DELIVERY OPERATIONS – CAN VARIABLE PAY SCHEMES REALLY WORK?

Summary/Abstract: Ongoing changes in business objectives increasingly result in implementation of diff erent business strategiesstriving to improve the workers’ performance. In that context, variable pay schemes have been utilisedto increase employees’ motivation and productivity. Unlike the sales and warehouse sector, a number ofissues emerge with respect to the variable pay schemes in delivery operations. Th e paper aims to examineissues and challenges associated with the introduction of variable pay schemes in the fi eld of delivery operations.In this paper, we illustrate and analyse a case study from delivery operations of the FMCG sector inthe market of Bosnia and Herzegovina. In this sense, the paper addresses the following research questions:What is the intended purpose of variable pay schemes? Which variables aff ect delivery operations? Whydelivery performance should be carefully monitored? Which external factors infl uence delivery driver productivity?Can variable pay schemes attract, motivate or retain employees? Can variable pay schemes reallywork in delivery operations? Th e discussion presented in the paper has important practical implicationsrelated to workforce management and may be useful to managers and other subjects involved in designingpay and reward structures.

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