Provided by: Society for Human Resource Management
Date Added: May 2003
"When you need key people to stick with you through tough times, reward them for their loyalty.The retention bonus, once a compensation tool reserved largely for top corporate executives, is increasingly being used to retain essential mid-level and rank-and-file employees, particularly in companies facing a financial crisis.Though still less common than referral and hiring bonuses, retention bonuses, also called ?stay? bonuses, are becoming more popular. Mergers, acquisitions, divestitures and bankruptcies are among the scenarios in which HR professionals are recommending or administering these payments.
The concept is basic: If there is an employee you really need because of his talent or knowledge, you pledge to pay him."