Bonus is Sample provision on bonuses to employees

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Today, employees of the HR departments of many companies are increasingly relying on such a technique as bonuses. This allows you to significantly increase the attractiveness of the enterprise for job seekers and employees, and therefore makes it competitive. Another huge plus of bonuses is that motivated employees work more willingly.

The essence of the bonus system

According to the definition given by the Labor Code, bonuses are the accrual and payment of additional financial resources to employees of an enterprise in addition to wages. Such a scheme is available to absolutely all organizations, regardless of ownership and type of activity.

The bonus system at budget enterprises is determined directly by their management. At the same time, both the type of material incentive and its size can be appointed by the head of the organization himself. The main condition: the total amount of payments to employees (salaries plus bonuses) must fitin allocated appropriations.

For non-budgetary companies, things are a little easier. Since they are not en titled to funding, they do not have to report on how much money was spent on salaries. For this reason, such enterprises have a relative freedom of action. At the state level, a minimum wage threshold is determined, and on its basis, the company's management assigns salaries, bonuses, allowances and additional payments.

Types of bonuses: features of regular payments

The two types of bonus payments are most commonly used. The first of these is the remuneration, which is provided for by the wages adopted by the company. In this case, bonuses are systematic, that is, allowances are paid regularly (once a year, quarter, half year, month, week). Not all employees are awarded, but some specific circle, for example, economists, sales staff or employees of several departments. To deduce the amount of the bonus, the specific labor indicators and bonus conditions developed by the company are taken into account.

In addition, there is a fixed amount of payments: one official salary, its half or a percentage of the amount of wages.

All the nuances that accompany the process of calculating and paying financial remuneration of the first type are contained in the provision on bonuses to employees. This document is approved by the administration and, if necessary, coordinates with the trade union. The regulation imposes on the organization the obligation to issue a bonus to employees in a specific amount if they fulfillconditions.

More about the first type of awards

On closer examination, financial rewards of the described type are divided into two groups:

• Reward for achieving company targets. Such bonuses are the main incentive for staff, which encourages them to complete tasks.
• Incentive Rewards - Rewards for improvements to equipment, accounting systems, or other aspects of an organization's activities.

This type of bonus is combined into a special group and is used when an employee has achieved savings in raw materials, materials, any type of energy, or helped his company in another way.

One-time bonus is not a system

As the name implies, one-time financial rewards are not paid regularly. The main condition for obtaining them is the achievement of specific success in work or the onset of a significant event, for example, a public holiday, an anniversary of a company, industry, or a certain employee.

The model of employee bonuses in this case is as follows: the employee has been working conscientiously for the benefit of the company for ten years. In honor of such an anniversary, the chief issues a decree on issuing a prize to a distinguished person. That is, a memorable date becomes the basis for the payment of remuneration (this and other similar conditions are contained in the provision on bonuses to employees).

Why make up a position

This document can be attributed to local acts of the organization, that is, its structure andeach company develops its own content. The document applies only to employees of a particular enterprise.

A sample provision on employee bonuses is presented below.

When compiling it, the administration pays increased attention to the economic justifications for bonus payments. Their main task is to avoid the egalitarian principle in the distribution of rewards.

Based on the specifics of the technological process, the production cycle and the periods used for accounting, choose the time for bonuses. These same factors determine whether any area, shop, division, or the entire firm will be rewarded.

Additional payments and allowances that are taken into account when calculating bonuses

The salary of some employees of the enterprise may consist of more than one salary. Sometimes people take on additional responsibilities and responsibilities, which, of course, is reflected in the financial plan. Others are en titled to higher wages due to difficult working conditions or professional achievements.

If an accountant is involved in the accrual of regular remuneration, it makes sense for him to save the sample provision on employee bonuses created once as a template. When a company has more than one category of employees who have different types of financial bonuses, there should be several prepared templates.

A surcharge may be added to the employee's tariff rate in thatwhen he:

• Combines professions (positions).
• Follows the duties of another employee (who is temporarily absent).
• Working in adverse conditions.
• Works at night.
• Has an irregular working day.
• Achieved a high professional level (received a class or academic degree, noted for high achievements, carried out important assignments).

A more accurate list of surcharges is compiled for each enterprise on an individual basis.

Organization of bonuses: conditions under which remuneration is due

In order for the bonuses to really become a motivating factor for employees, they are distributed, calculated and issued in accordance with a system developed in advance.

There is nothing worse than unfair punishment or unreasonable encouragement, as in this case the authority of the head is undermined, and the trust of employees can no longer be counted on.

The conditions and indicators on the basis of which bonuses are awarded are set out in the bonus regulation (the sample proposed above is just one of the possible options).

How to create a premium system

System designers take into account the following factors:

1. Have the set goals been achieved and do they affect labor efficiency.
2. Have you received the indicators for which the bonus will be calculated.
3. Have conditions been created under which bonuses can be made.

For employees of different services and departments of the sameenterprises, bonus indicators, goals and conditions will be different. For example, technical control officers can only be awarded when specific product quality indicators are achieved. For designers and technologists, remuneration is often assigned for the fact that they develop and implement new equipment, technologies and materials. Accountants earn bonuses by writing certain reports and performing calculations.

In the event that the result of the work can be assessed using objective indicators (quality, quantity, volume), the amount of remuneration is tied to such data. If the content of the work and its results are more abstract (scientific achievements, research, other creative tasks), then the amount of payments depends on the personal contribution of the specialist to the common cause or is determined by an expert assessment.

Which employees of the company are given bonuses

Bonus payments are due only to those employees who are on the staff of the company, as well as people who work under a fixed-term employment contract (hired for a specific task). In the event that an employer concludes a civil law contract with a person, the section on monetary remuneration is negotiated separately.

For non-staff workers, different conditions apply: the management may include a bonus clause in the collective agreement or discuss the need for additional payments with a trade union representative, chairman of the labor collective council or with another authorized person.

How is the submission for a bonus

When the next period comes to an end (month, quarter, year) or a specific task is completed, accounting staff and department heads start distributing bonuses.

First of all, accountants prepare statements on expenses for this period, on the wage fund and on how much funds will be directed to the financial motivation of employees.

Next, the director examines the reporting data received from the departments (if any), and distributes funds between departments.

The job of deputy heads is that they supervise the units entrusted to them (branches, departments, laboratories). At the end of the bonus period, they must submit proposals regarding the amount of incentives for the heads of these structural units. At the same time, deputy directors listen to the opinion of their subordinates (heads of departments) about what kind of bonus should be given to specific employees. Most companies choose to submit proposals in writing.

Completion of submission procedure

At the next stage, all proposals submitted must be agreed upon. In conclusion, they are approved by the director of the enterprise, and this becomes the basis for the corresponding order.

Administrations of some companies also prefer to coordinate their actions related to financial incentives for employees with representatives of the labor collective or trade union.

Whenall conditions are met, the head can issue an order for the organization, which will present the grounds for issuing bonuses and its size for each employee. Regardless of whether the company has adopted a bonus position, the order is still issued.

Some nuances

If employees of a large company are rewarded, then the list of all surnames is not indicated in the order. They are part of a separate document prepared by the HR department. This list is considered an annex to the order.

All financial rewards are necessarily reflected in the personal account of each employee, and also appear in his payroll. This is necessary in order to be able to derive the average wage with maximum accuracy.