When we think of the employee bonus, we usually think year end or sign on. These aren’t the only types of bonuses, however. Bonuses can come at any time and in forms other than cash.
For example, employers give bonuses for a job well done at the end of a project. The bonus doesn’t have to be cash either. Bonuses can be creative gifts. Let’s check out some different types of bonuses and when employers usually give them.
Employee Bonus Options
- Gift cards
- Travel vouchers
- Stock options
While cash is usually the most sought after option, many employees realize that cash is taxed. If they’re planning to use the bonus for savings or entertainment anyway then other options might be better.
Employers can get gift and travel vouchers at a reduced bulk rate. This helps employers save money on bonuses so they can give out more of them.
Employee Bonus Schemes
Company Wide Bonus Schemes
Company wide bonuses are the most common and are included as part of the employee benefit packages. Examples of these are:
- Sign on bonus
- Profit sharing
- Holiday bonus
- End of year bonus
Performance Bonus Schemes
Performance based bonuses are not a part of an employee’s benefits package but they are a great way to boost productivity and incentivize employees. Some of these include:
- Individual incentive
- Team incentive
- Achievement award
- Sales commission
- Milestone bonus
Measuring the Employee Bonus
How you measure performance based employee bonuses varies but it is very important to consider.
Some bonuses such as sales incentives are figured based on some pre-set criteria such as a sales quota.
Discretionary bonuses are bonuses paid at the discretion of the employer, or any time the employer sees fit. In an employment contract, it’s a good idea for an employer to stipulate the type of bonus they plan to offer. This protects the company from misinterpretation.
The Timesheets online employee management software offers expense and HR tracking which is used to track bonuses. We would love to show you how this works!