Classification of Employee Bonuses

Most employees receive most of their compensation in the form of salary. But over the past few decades, employers have increasingly begun to rely upon other forms of compensation. One of the greatest advantages of other forms is that the amount received can vary depending upon the success of the company or the level of the employee’s contribution, so that employees who contribute more know in advance that they will be more highly compensated.

While stock options have received a great deal of attention in recent years, it is important not to neglect other forms of non-salary compensation. The humble employee bonus lacks the high-technology appeal of its wealthy cousin, but it is still a very common method for motivating employees to increase their level of contribution.

Next Sections