Perhaps everyone will know that the term Bonus is often used by organizations and businesses to name a certain bonus, for employees in addition to a fixed salary. Let's find out what Bonus is with Giaiphapdonggoi.net!
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1. What is Bonus?
What are bonuses?
“A form of compensation is not guaranteed and is usually paid upon completion of a certain event,” said Adi Dehejia, Chief Financial Officer of The Muse.
Bonuses come in many shapes and sizes, but they're generally performance-based, meaning a company distributes them based on how an employee or group of employees contributes to the team's goals or company - usually based on revenue.
Bonus is financial compensation that is higher and in excess of the recipient's usual salary. Bonuses can be given to both entry-level employees and to senior executives. Bonuses can be hung as an incentive for potential employees and can also be distributed to the shareholders of the company. A company may use bonuses to reward achievements, to show gratitude to employees who hit life expectancy milestones, or to entice employees who have not yet entered the corporate hierarchy. company.
Bonuses can be both financial (i.e. cash) and non-financial (i.e. commodities). Gifts that employers give to their employees, such as Christmas presents, are often considered bonuses.
Some contracts stipulate when an employee can be entitled to bonuses, while some specifically limit or limit the amount that can be earned above the employee's base salary.
2. Why do companies offer bonuses?
Why do companies offer bonuses?
Often bonuses are offered because that is what the market requires companies to do. If other organizations of a similar size, industry or geography are offering bonuses to their employees, a company may feel obligated to do the same to compete for talent. . This is why you will rarely find a sales role without a bonus structure.
But the main reason why employers are attracted to bonuses is that they encourage employees to work hard to help the company succeed. "They want to tailor incentives like, 'You do well if the company does well,'" says Dehejia. And it tends to work – those who know they can make more money by bringing in more revenue, whether directly (like sales) or indirectly (like marketing or leadership). executive) will be highly motivated to do so.
“They are trying to share the risk between the company and the individual,” adds Dehejia. When a company is underperforming because of poor performance, employees will pay the price with lower remuneration - as opposed to someone without a bonus structure who is paid the same way no matter how well the company performs. how.
Some people may find this concept stressful. But the flip side - annual salary without bonus - means there will be times when you'll work harder and not be compensated for it. That is seen as a trade-off and certain people are willing to make.
Dehejia notes that bonuses should never be seen as the sole motivator for employee retention and motivation. “Compensation is a vehicle for boosting performance, but it is not a substitute for management, it is not a substitute for praise, learning and development, training, opportunities,” he said. That is why companies should always think about the merits of their bonus plans and balance them with other perks and benefits.
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3. Types of bonuses (bonuses)
Employers can reward a number of different reasons, such as motivating employees, boosting morale, rewarding good performance, and increasing productivity. Bonuses can be given to current employees, potential employees or shareholders.
Types of bonuses (bonus)
Incentive Bonus
Some types of bonuses are intended to encourage specific activities or behaviors, for example:
Sign-in bonus: Employers sometimes offer a financial reward when someone signs a contract with the company. The sign-up bonus can be a specific amount, but it's often also help with relocation, seasonal travel tickets, or other forms of compensation that make a job offer appear more appealing. .
Retention Bonus: If a company is going through a particularly stressful period or a significant organizational change, they can reward employees who stay with the company. Retention bonuses are especially popular for companies involved in mergers or acquisitions.
Referral Bonus: Some companies have a bonus referral program
ho current employees have referred candidates for job opportunities. Under these plans, current employees receive a bonus if the person they refer ends up being hired.
Performance Bonus
Unlike incentive bonuses, which are related to specific activities or behaviors, performance bonuses are more general forms of incentives intended to encourage employees to work harder throughout the financial year. However, performance bonuses are often related to specific performance metrics. The value of bonuses is usually calculated based on the extent to which an employee, team or department exceeds specific goals or quotas.
Performance can be evaluated monthly, quarterly, or annually, but performance rewards are typically awarded at the end of the calendar year or fiscal year.
Bonus for shareholders
Incentives and performance bonuses are typically paid to employees; however, companies can also reward their shareholders as a way to increase shareholder ROI
Dividends and stock bonuses are the most common types of shareholder bonuses. The value of the bonus (the number of bonus shares or the amount paid for the dividend) usually reflects the number of shares each shareholder already has.
Through the above article, Giaiphapdonggoi.net has explained the meanings of the word "what is a bonus?". Hope the above information has helped you better understand what the bonus is and have a correct view of this bonus.
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