In the middle are a large number of schemes which, while not entitling the employee to a specific amount for achieving a particular result, do give some rights.
Other schemes may be entirely discretionary in that they do not give any right to a particular level of bonus or indeed to even be considered for a bonus. A contractual bonus is therefore a binding promise to pay, subject to certain conditions being met.
Alternatively, a contract may include a guaranteed right to a certain level of bonus during a particular timeframe. Where the employee meets those criteria, the employer will effectively be obliged to pay out the appropriate level of bonus. For example, such bonuses are often calculated by reference to specific performance criteria. Some bonuses are contractual, that is employees are told they have an entitlement to participate in the bonus scheme and/or an entitlement to a certain amount, usually calculated in accordance with a specific formula. Bonus schemes tend to either operate outside the express terms of the contract of employment or be referred to in a manner involving discretion, in either case bringing about a level of uncertainty. Despite the benefits that bonus schemes can have on employee retention, the legal implications of each scheme need to be understood. Employers will communicate whether their employees are able to participate in a bonus scheme and provide employees with information on how the particular scheme works. In some instances, employers may choose to offer bonuses at a flat rate to all employees. What are bonuses and how do they work?īonuses are often performance-based (either company, individual or both), with higher awards being granted to those achieving greater targets. One of the most common forms of incentive-based compensation is the bonus, with some employers implementing generous schemes in an attempt to beat out the competition. As a result, we have seen an increase in employee incentives and compensation in an attempt to improve employee happiness and wellbeing and encourage loyalty.
In recent years, the battle to retain talent has been a growing challenge faced by many employers across varying industries.
0 kommentar(er)
