Study reveals decline in employee bonus program offerings

A new WorldatWork study, Bonus Programs and Practices, found that the prevalence of a variety of bonus programs have declined since 2008 and are at approximately the same levels as 2005. In 2010 when the survey was conducted, employers’ use of referral, sign-on, spot and retention bonuses had gone down since the survey began in 2001. Referral bonuses remain the No. 1 bonus program employers are using today.

The survey found that, when a referral bonus program is in place, an average of 13 percent of new hires come from employee referrals. Bonus programs organizations offer by type, include:

  • Referral bonus (a cash award paid to a current employee for referring a successfully hired job applicant) = 60 percent.
  • Sign-on bonus (a cash bonus given at the beginning of a service period, usually for accepting an employment offer) = 54 percent.
  • Spot bonus (a type of informal recognition that is delivered in cash, spontaneously or “on the spot”) = 43 percent.
  • Retention bonus (a cash award typically tied to the length of service or some other milestone) = 25 percent.

In addition, the survey found that 85percent of employers offered at least one type of bonus program while 15 percent of the sample did not offer any bonus programs at all. Nine percent of surveyed employers offered all four types of bonus programs, and the average number of bonus programs offered was two.

Source: WorldatWork; www.worldatwork.org.