Performance incentives and bonus arrangements

Systematically encouraging and recognizing achievements and switching to remuneration systems that allow employees to share in the Company’s success for the long term are another component of our human resources strategy. Universal and uniform criteria for skills development and performance evaluation have been in place at Volkswagen AG since 2010. These apply to the entire workforce – from vocational trainees to senior executives. The criteria are underpinned by concrete incentive systems in the remuneration structure.

Volkswagen AG’s employees covered by collective pay agreements have a remuneration system that comprises three key elements:

  • basic pay in the form of a competitive monthly salary,
  • a performance-based remuneration component, which recognizes the achievements of each individual employee, and
  • the right to a bonus arrangement anchored in the collective pay agreements.

This three-tier remuneration system has proven its worth as a tool for the workforce to participate in the Company’s success. At the same time, it helps recognize individual achievements while maintaining competitiveness. It is therefore being increasingly implemented as the standard throughout the Group.