Recently a modified -means algorithm for vector quantization design has been proposed where the codevector updating step is as follows: new codevector = current codevector + scale factor (new centroid current codevector). This algorithm uses a fixed value for the scale factor. In this paper, we propose the use of a variable scale factor which is a function of the iteration number. For the vector quantization of image data, we show that it offers faster convergence than the modified -means algorithm with a fixed scale factor, without affecting the optimality of the codebook.