In an employment relationship, performance is owed as such, not a specific outcome. The motivation for performance-oriented work is often the structure of the chosen compensation model. Therefore, the design of variable compensation models is becoming increasingly important in business practice. This work addresses the fundamentally relevant co-determination rights concerning variable compensation models. Additionally, as goal-oriented management and the conclusion of target agreements increasingly take hold at lower hierarchical levels, the author pays special attention to target agreements. The discussion particularly focuses on whether and to what extent there is a co-determination right of the works council in the introduction of target agreement processes. Through practical drafts of framework agreements for variable compensation models, it is examined which regulations should be prioritized and whether they are covered by the co-determination rights of the works council in individual cases.