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Home > QFINANCE Dictionary > Definition of bonus plan

Definition of

bonus plan

Finance

program for rewarding employees with extra money a form of incentive plan under which a bonus is paid to employees in accordance with rules concerning eligibility, performance targets, time period, and size and form of payments. A bonus plan may apply to some or all employees and may be determined on organization, business unit, or individual performance, or on a combination of these. A bonus payment may be expressed as a percentage of salary or as a flat-rate sum.

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Recommended Further Reading (Term count)
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    by S. David Young
    The value-based management movement is based on two assumptions. The first is that the main aim of any business in a market economy is to maximize shareholder value. The second is that markets are too competitive for companies to create such value by accident. They must plan for it. And that means having the right culture, systems, and processes in place so managers make decisions in ways that deliver better returns to shareholders.At the very...
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    The decision of where to be in the market is a matter for corporate policy (for example, at the market median, or the upper quartile rate), reflecting labor market pressures and attraction and retention strategies. Short-term incentives are usually annual bonus schemes. Long-term incentive plans
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  • Understanding the Requirements for Preparing IFRS Financial Statements

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    of the disclosures required under IFRS calls for the involvement of all departments in a company: the human resource department has to provide information about employee benefits (pensions, option plans, bonuses), engineers and technical people have to give information allowing estimation of the useful life
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Definitions of ’bonus plan’ and meaning of ’bonus plan’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’bonus plan’ and other financial terms with our online QFINANCE Financial Dictionary.

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