In addition to an agreed monthly fixed salary, some companies offer their employees an additional bonus that is paid on an annual or quarterly basis. In this way, employees can share in the company's success or be rewarded for reaching previously agreed goals. A bonus programme should ensure that a company makes higher payments in times of growth rather than in weaker years. Furthermore, the prospect of the bonus should increase employee motivation and performance. The recognition that employees receive through the bonus programme can contribute towards staff retention in the long-run.
A zero-based bonus refers to a remuneration programme in which a particular group of employees is excluded from a bonus programme. A bonus payment may, for example, be dependent on the length of service, occupation or fixed salary.
Image: © Rawpixel, Ptich-ya, Margarita Tkachenko - shutterstock.com