6 Types of Bonuses and Perks for Employees


Bonuses are a way to show appreciation of an employee’s effort or performing a task beyond and above the call of duty. This form of recognition can take many forms, but the whole point behind the gesture is to make employees feel valued.


Bonuses can be structured and follow the traditional format of handing of a monetary reward at the end of a year, a referral bonus or monetization of unpaid leaves, bonuses awarded as a result of a good year or earned leaves. Many organizations have become a little more adventurous and introduced vacations, trips, training opportunities and similar activities to show appreciation.

Perks for Employees

Structured bonus programs reached record-high funding levels this year and are projected to do the same in 2020, says Ken Abosch, an employee rewards consulting leader at Aon, a global consulting firm. He says structured bonus programs are still very popular with organisations and on average companies are planning to budget 13 per cent of their payroll for bonus expenses. It was 12.9 per cent in 2019.


“Unfortunately, these bonuses aren’t for everyone, like clerical or hourly workers,” Abosch says. “This has been a long-standing trend that hasn’t budged very much … about 25% of hourly workers are covered by these types of arrangements.”


Beyond the yearly bonus, we have the–  

Employee referral bonus where an employee is rewarded for referring someone for hiring This helps cut the cost of the hiring process including advertising, weeding through candidate applications, etc., it also promotes loyalty by stimulating engagement.



Employers can offer employer contribution to a health plan. Research shows that more than one-third of employers provide contributions in the US. They can share premium costs, in some organizations ( 99 or fewer employees) the employer covers the cost in full.


Profit-sharing bonus 

Sometimes a company offers employees a bonus from the profit made by the company, and it can vary from 2 percent to 8 or rarely 15 percent. It is a bonus on top of the basic salary dependent on the company’s profit. Mostly, it is given across the board to all employees.

It is a way to show that an employee’s performance can affect the company’s bottom line and is an incentive to work better to improve the bottom line.

Bonuses for Employees

Gain Sharing

This is a bonus given on the basis of improvement in product quality and productivity. I t is mostly given in manufacturing industries. It encourages employees to work better at their tasks, and they take the responsibility of improving t.he quality and quantity of production. Gainsharing bonus has been found to be very successful as the workers feel vested in the outcomes. 

Types of Bonuses

Spot bonuses

They are generally recognition of an individual’s performance and are just tokens which can be in cash ranging from 50 to 500 dollars. Or it can even be a gift card or a dinner for two kinds of bonus. Companies always budget in such rewards for 25 percent of the employees.


Retention bonus

Given in unusual circumstances and in instances of mergers and acquisitions, when companies do not want to lose some key figures or workers. The bonus encourages employees to stay until a specified date so that critical activities can continue without disruption. Retention bonuses are usually about 10 to 15 percent of salary.


Other bonus differentiations

Some companies go out of their way to provide perks and benefits that become a part of that particular place of work. For exampleAt HubSpot, employees can take time off at their convenience. It’s important that employers trust workers not to abuse the policy.


Financial support: Employers offer tuition assistance. Company provided student loan repayments rose to 8 percent in 2019. Auto subsidies for personal vehicles. Free snacks and services like dry-cleaning reimbursements, paid holidays, pets at work and similar perks.

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Anna Verasai
Anna Versai is a Team Writer at The HR Digest; she covers topics related to Recruitment, Workplace Culture, Interview Tips, Employee Benefits, HR News and HR Leadership. She also writes for Technowize, providing her views on the Upcoming Technology, Product Reviews, and the latest apps and softwares.

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