This is a bonus plan system document and it includes everything you need to develop and adminster a bonus plan for your small business. It is a 5 page word document, containing, 1505 words.
The purpose of the Employee Bonus Plan is to focus the attention and efforts of employees on financial and operational goals and to share the benefits of increased productivity, cost reduction, team work, and quality improvement with employees as a reward for their contributions to the achievement of these goals.
The premise of this bonus plan is simple. Employees are given a bonus pot, which is a % of their salary. This bonus pot is combined with a Company Performance Factor (CPF), Individual Performance Factor (IPF), and Team Performance Factor (TPF) to determine the actual bonus award that will be paid, according to the formula shown below.
Base Salary X Bonus Target X CPF X IPF X TPF = Bonus
NOTE: The following examples are for illustration purposes only.
Example 1: A participant earning a base salary of £50,000 per year, bonus target of 10% of base, Financial Factor of 110% of goal, individual performance of Commendable, team factor of 1.1:
£50,000 X 10% X 1.1 X 1.25 X 1.1 = £7,562.50