Chapter 15. Cash Bonus Plans and Recognition Programs
In today’s high-performing organizations, total rewards professionals are charged with supporting the attainment of corporate objectives through the development and implementation of strategies, which ensures that key employees feel valued and rewarded for their efforts. For rewards professionals focused on creating attraction and retention programs, cash bonuses are effective tools and remain among the most frequently used variable pay plans.1
Used correctly, a cash bonus can be a quick, easy, and valuable tool to promote employee satisfaction and commitment. But, used incorrectly, it can be a waste of precious dollars and a source of discontent in the work force.
Cash bonus plans—specifically sign-on, referral, spot, and retention bonuses—can be designed to reward performance and behaviors that are tied to the company’s bottom line, instilling pride in the organization. Employers readily implement these tools to communicate a fresh commitment from the employer to the employees and remind employees how much they are appreciated.
Each of these bonus vehicles is highlighted below and discussed in detail.
What Is a Sign-on Bonus?
A sign-on bonus is a premium compensation incentive that is given up front and is not based on performance. It is useful in marketing the company to large numbers of potential candidates to motivate them to apply for job openings and for recruiting talent that is in high demand, especially in technical and ...
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