There’s more than just the base salary when it comes compensation. It’s actually called basic pay because it is the salary that an employee will receive when they start working. But, total compensation is the sum of all base pay, plus benefits, stock options , bonuses, and raises. In many occupations, additional forms of compensation exist such as overtime and on-call pay.
Bonus pay, collectively, is extra compensation beyond your hourly wage or base salary.
You may be asking, “What is all this other compensation?” How can I get them?
We’re here for you. Here’s a cheat sheet that will guide you through the most popular bonuses offered by the top companies.
1. Annual Bonus
The most common bonus comes in the form of an annual bonus based on an employee’s base salary. A target bonus is an award that each employee receives at the end. If the company or manager decides that an individual, a.k.a. You have reached certain personal goals and the annual bonus will then be paid. The key is that the bonus must be earned by the company/department in order to be paid.
As with most bonuses the amount and percentage of the annual bonus and/or the percentage may vary between departments or positions. This decision is made jointly by the company’s leadership team and HR.
2. Signing Bonus
A signing bonus (or what Amazon calls a Sign On Bonus) is a onetime payment to a job candidate who is highly sought-after by a company recruiter. This could be considered an attractive carrot that a recruiter offers to you in order for you to join the company.
A sign bonus could be given to you if:
- You negotiate for $100,000 but the recruiter will only give you $90,000. A signing bonus of $10,000 may be offered to fill in the gap.
- You may be offered a better offer from another company.
- The company wants to take your top job and will need to cash in on the stock options you left behind.
It is important to know that signing bonuses typically require that you, as an employee, remain with the company for a minimum of 6 months or a maximum of one year.
3. Spot Bonuses or Discretionary bonuses
Spot bonuses are available for those who have met a milestone or displayed exceptional performance. Sometimes referred to as a discretionary Bonus, these are bonuses that pay out in three- and four-figure amounts at some companies. They also reward employees who perform beyond the call of duty. Managers or executives generally have discretionary money to reward employees that have made a significant difference in the business.
These gifts may be given out in an instant to acknowledge outstanding performance. You may also receive additional PTO and gift cards from your employer as spot bonuses.
4. Retention bonus
Retention bonus are awarded to employees who remain with the company over a longer period. These bonuses can be used to retain high-performing workers, especially in an hot job marketplace. Many companies offer retention incentives to employees to stop them leaving for new jobs, as employee poaching has increased over recent years.
Typically, a retention incentive is a onetime payment. Most companies prefer these over a pay increase. This is because they may be unable to commit to long-term increases.
5. Referral bonus
According to U.S. According to the U.S. Office of Personnel Management “A referral bonus (or bonus) is an award that an employee earns by referring another person for an advertised, difficult-to fill vacancy. After the vacancy is made public for open competition using proper channels. Referral bonuses can be paid to the successful candidate after they are hired by the agency.
Referral bonus are for current employees that help to recruit new employees. They vary depending upon a few factors.
- Role – Engineers, for example, are eligible to receive a higher employee referral bonus
- Difficulty hiring: A company might increase the bonus or incentive if they decide that a particular role is too difficult to fill.
- Diversity: Intel, a company that encourages diversity in its workforce, rewards veterans who refer women to underrepresented groups or veterans.