Some companies reward employees on the spot for achievements that deserve special recognition. Spot bonus awards are typically $50 and up and can be made by your immediate supervisor or any higher-level person in your company. You can get these for just being extra helpful. The math is in employees' favor: companies with spot bonus programs offer approximately 1 percent of payroll and expect to give out such bonuses to 25 percent of the employees eligible for them, allowing them to earn more than one instant bonus in a year.
Noncash Bonus
Although the wrong kind of "employee of the month" concept can be cheesy, it's all in the execution. A well designed noncash bonus program can instill pride and improve employee morale. Employees who have done a great job should have to come to the front of a crowded room at a special ceremony as if they are receiving an Academy Award. The certificate or trophy should be thoughtfully and cleverly designed, and appropriate to the occasion. These awards are sometimes coupled with a token tangible award, such as a gift certificate, a bonus day off, or a great parking space.
You know your company has a good noncash bonus program if these awards are coveted, and if people who receive them display them proudly at their desks or in their homes. Moreover, this type of award may help you get a promotion or a new job, so include it on your resume.
Sign-On Bonus
No longer just for star athletes, sign-on bonuses have become commonplace. Their usage now extends to nearly all level of employees, especially when unemployment is low and top talent is hard to find.
Given to new employees who have just joined the company, this award serves two purposes:
- Establish goodwill
- Buy out any compensation "left on the table" from a previous employer.
The second purpose is important to remember. Before joining a new company, be sure to account for every kind of compensation program in which you participate. If you are expecting a bonus in a few months, ask your new employer to buy you out of it. If you have any stock options, particularly options that are in the money, ask the employer to buy them out (either in cash or new stock options).
Don't forget to include profit-sharing bonuses or defined contributions (for example, a 401(k) match or an Employee Stock Options Program (ESOP)) made to your retirement account. Remember, a sign-on bonus is to keep you whole as you trade one set of compensation programs for a new one.
Medium to large signing bonuses may be paid over a period up to a year to protect the company's interests.
Mission Bonus (also known as a Task or Milestone Bonus)
Task bonuses are given to a team of employees for achieving a milestone or for completing an important project. Usually, these bonuses are offered sparingly, but they have been used more frequently in software and hardware development to encourage meeting tight deadlines. Sometimes these programs incorporate a quality measure to guard against too much focus on speed.
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