Bonus payments that are not include in salary
Bonus payments and cash incentives are forms of payment that are not incorporated into an employee´s salary. Incentives are used to influence future employee performance and to encourage the employee to meet predetermined targets. Bonuses can be used in the same way or could be ad-doc one-off rewards given retrospectively for work has been done well. Both are intended to help attract and retain talented workers, to motivate and ensure they are engaged with the organisation with the intention that this will ultimately lead to an enhancement of the performance of the organisation.
Traditionally our bonuses and cash incentives were used as a motivational tool for manual workers to use alongside basic pay or as an addition to a piece work system.
More recently it has become normal to use this approach for managers and non-manual workers, this forms a part of a “new pay” philosophy which the guaranteed basic pay from a small proportion of the overall reward package with the aim that the bonuses will be linked clearly to improved performance which in turn links very clearly to achieving the organisation strategic objetives.
There is less security of income for managers and therefore more incentive for them to work harder to be successful and this is ongoing as bonuses constantly have to be re-earned during each financial period.