Bonus Payments: What you need to know

Bonuses are a way for employers to recognize and reward employee accomplishments in a monetary form. Bonuses can become an integral part of a company's compensation package and have gained favor as a way of tying pay to performance.
While some bonuses can be entirely gratuitous, there is an element of gift giving in all of them. Employers that award bonuses may receive certain practical and tangible benefits in return. A bonus is seen as an expression of goodwill from employer to employee. Whether it's a singular reward for a significant accomplishment or a holiday gift that all receive, bonuses exemplify a personal touch and may evoke incalculable loyalty and dedication.
Bonuses allow organizations to link employee compensation to performance and allow for increased productivity. They can be used as an incentive to retain top performers and can be used to eliminate or reduce annual salary increases.
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Bonuses come in many different forms. They can be express, implied, based on the company's performance in a given period, or based upon an individual's performance. Express bonuses are those that are promised (e.g., you will receive this much); implied bonuses might be reasonably inferred (e.g., if sales goals are met, you might expect to receive a certain percentage of your salary as a bonus). The following types of payments might accurately be described as bonuses.
Performance awards. These can be given for specific, individual, or group achievements and are commonly used to establish incentives for the fulfillment of particular organizational goals. They range from large payments made to high-level executives who have achieved objectives to inexpensive gifts awarded to employees for ...

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