I. NAČINOVIĆ BRAJE: The perspectives of variable pay in Croatia: is there a gap between employee pay preferences... EKONOMSKI PREGLED, 72 (4) 550-570 (2021) 550 Ivana NaĀinoviþ Braje * JEL Classication: J31, J33, M52 Original scientic paper https://doi.org/10.32910/ep.72.4.3 THE PERSPECTIVES OF VARIABLE PAY IN CROATIA: IS THERE A GAP BETWEEN EMPLOYEE PAY PREFERENCES AND ACTUAL COMPENSATION PRACTICES? Variable pay can have numerous benets for the employee and the em- ployer, however, the overall effect of variable pay will depend upon employee attitudes and preferences towards such form of compensation. Considering that reward systems in Croatia traditionally used the equality principle, the objective of this paper is to examine the role of variable pay from both em- ployee and employer perspectives. Research results are based on a Delphi research of employee attitudes about variable pay and empirical investiga- tion of actual employers’ variable pay practices. The Delphi study results indicate a lack of consensus about employees’ preferences for variable pay in Croatia. However, practice shows that some form of individual variable pay has been adopted by most examined companies. There is some gap be- tween preferences for variable pay and actual compensation practices so this paper identies conditions under which acceptance of variable pay can be improved. Keywords: compensation, variable pay, pay preferences * Ivana NaĀinoviþ Braje, Ph.D., associate professor, Faculty of Economic & Business, University of Zagreb (e-mail: ivana.nacinovic@efzg.hr). The paper was received on 09.10.2018. It was accepted for publication on 10.01.2019.