Section: HR & People · CompensationDifficulty: Easy
Performance Bonus
USUK
A variable pay component awarded based on individual or organizational performance.
Also: incentive pay · performance incentive
Definition
A performance bonus is a one-time or periodic cash payment made to employees as a reward for achieving specific individual, team, or organizational performance targets. Unlike base salary, it is variable and contingent on meeting pre-defined goals. Performance bonuses can take the form of annual bonuses, quarterly incentives, or spot awards and are designed to motivate and reward high performance.
Example
“After exceeding her sales target by 120%, the regional sales manager received a performance bonus of three months' salary as part of the annual incentive scheme.”
Synonyms
- incentive bonus
- merit bonus
- annual bonus
- reward bonus
Images
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