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Think paying bonuses isn't worth it? Consider these five benefits

by , 03 November 2014
The Labour Law for Managers Loose Leaf Service defines a bonus as something that you give or pay to an employee over and above his usual payment. It's given as an incentive or reward for good work.

For example, your employee brings in a new client who then places orders with you to the value of R200 000. To reward him for a job well done, you pay him an extra 10% on his salary at the end of the month as a reward.

When it comes to bonuses, some employers decide not to pay them. They think it's not worthwhile and it's just an unnecessary expense.

If you share a similar view, you need to know that there are some benefits to paying bonuses. Here are five of these benefits...

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Here are five benefits of paying bonuses

According to the Labour Law for Managers Loose Leaf Service, paying bonuses can:
1. Motivate your current employees;
2. Make your company attractive to potential employees;
3. Make sure skilled and valuable employees stay at your company;
4. Ensure your remuneration and benefits are competitive when compared to other employers; and
5. Ensure you get better results from employees by linking pay with performance.

Now that you know about the benefits, take a look at the three types of bonuses you can pay

The three most common types of bonuses are:
  • A discretionary bonus;
  • A performance bonus; and
  • A guaranteed bonus (e.g. a thirteenth cheque).
Before you knock bonuses as not worthwhile, consider these five benefits.
PS: For more information on bonuses, check out the Labour Law for Managers Loose Leaf Service. The Loose Leaf Service also gives you all the details you need for maximum protection in labour-related problems.

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