According to WorldatWork’s 2014 survey, “Bonus Programs and Practices,” sign-on, spot, and retention bonus programs are gaining momentum with employers.
“The uptick in sign-on and retention bonus programs may indicate that the war for key talent could be heating up as the economy improves, leading to an increased focus on attracting and retaining employees,” said Rose M. Stanley, CCP, CBP, WorldatWork total rewards practice leader. “In addition, with continually small incremental increases in merit budgets, spot bonuses may be a means to recognize talent for special excellence during the year.”
“Employers are using sign-on and retention bonuses to attract and retain the talent that they need. They are targeting spot bonuses as an additional means to recognize employees that are excelling when other forms of cash compensation have been restricted.”
Spot bonuses, most commonly given for special recognition, going above and beyond, and project completion, are almost universal for employees below upper management. For example, the WorldatWork survey shows that the number of spot bonuses awarded in the past 12 months has stayed about the same for 67% of organizations, with almost a quarter, tough, showing an increase.