Retention Bonus

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Definition of 'Retention Bonus'

A retention bonus is a one-time payment made to an employee to encourage them to stay with the company. It is typically offered when the employee is about to leave or when the company is going through a difficult time.

Retention bonuses are often used as a way to retain top talent. When a company is facing competition for employees, it may offer a retention bonus to make sure that its best employees do not leave for a competitor. Retention bonuses can also be used to reward employees for their loyalty and dedication to the company.

Retention bonuses are typically paid in cash, but they can also be paid in stock or other forms of compensation. The amount of the bonus will vary depending on the company and the employee's position. Retention bonuses can range from a few thousand dollars to several hundred thousand dollars.

There are a few things to keep in mind when considering a retention bonus. First, the bonus should be large enough to make a difference to the employee. Second, the bonus should be structured in a way that encourages the employee to stay with the company for a long period of time. Third, the bonus should be fair and equitable, so that it does not create resentment among other employees.

Retention bonuses can be a valuable tool for companies that want to keep their best employees. However, it is important to use them wisely to avoid creating unintended consequences.

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