Bonuses and Other Incentives - (1)
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Bonuses: Short-Term Incentives
A short-term incentive or “bonus” may be used in several ways, but each of these ways requires something to have been achieved. That something may centre on an individual, a team, a task or project, or the company as a whole. The nature of the event for which a reward is provisioned may range from the nebulous to the precise. Bonuses cost money – usually a lot of money if they are to be significant to the recipient. Despite this high cost, senior management often spends far less time taking decisions over bonus planning than they would over an investment of a fraction of the cost.