A bonus plan is an incentive offered to employees in which they can earn extra money by abiding by various requirements. Business owners are allowed to set whatever requirement they deem fit in order to receive the bonus. For example, bonuses may only be open to full-time employees. The bonus can either take the form of a flat-rate sum, or it can be a percentage of the employee’s salary. Many employers choose to have these programs in place as a means to motivate and incentivize workers. One of the most common forms a bonus plan takes shape is an “end of the year” bonus where everyone receives a certain amount. Bonus plans in conjunction with other type of employee benefits can be highly useful in retaining strong workers.
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