Definition

Annual Bonus

Annual bonus refers to plans that are designed to motivate short-term performance of managers and are tied to company profitability. It also means employees’ motivational short-term performance reward for fulfilling their responsibilities and for delivering superior results. 

 Short-term bonuses can easily result in plus or minus adjustments of 25% or more to total pay. Three factors influence one’s bonus: eligibility, fund size, and individual performance.

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