SOP Bonus & Salary Increment (Examples & Templates) (Word DOCX)

SOP Bonus & salary Increment (Examples & Templates)

Contents
1. Policy of SOP Bonus & salary Increment
2, Procedures of SOP Bonus & salary Increment
3. Flowchart of SOP Bonus & salary Increment
4. Employee Salary Increment Parameters Form
5. Employee Bonus Parameters Form

An increment or a bonus is undoubtedly a mood booster. Whether it leads to employees improving their performance is another matter. However, if handled well, extra money can definitely boost one's personal finances.

Consistent, fair, and streamlined bonus and compensation processes can make a big impact on employee engagement and turnover rates. Because if your people don't feel comfortable asking you for proper compensation, they're more likely to quit and start a new job that offers a more competitive salary.

A salary increment is an increase in an employee's annual pay in the form of a percentage. Individuals use this percentage as a reference point when negotiating pay increases, while employers utilize salary increments to give yearly raises more fairly and easily. A salary increment system helps make the compensation process more consistent, standardized, and scalable for companies.

Employers may award salary increases for exceptional performance, to correct internal salary inconsistencies, bring employees' pay up to current market standards or retain a particularly valuable or hard-to-replace employee. Employers generally expect that a salary increase will encourage the employee to be more productive, thereby covering much of the cost of the pay raise.

Bonus is an extra pay and sometimes it's a statutory payment made out of profits of a company. Sometimes bonus may also linked with companie's performance and employee performance in order to distribute in most appropriate way. Most bonuses are linked to performance. Profit-sharing and gain-sharing bonuses reward employees for their efforts to boost company profits or meet improvement targets. They typically are paid across the board to all employees or to everyone in a particular department or business unit. Spot bonuses reward individual employees for achievements that deserve special recognition. Task bonuses go to individuals or teams that complete important projects on time and within budget.

A bonus and a salary increase both represent an increase in an employee's compensation. The difference between them is that a bonus is a one-time payment, while a salary increase is a permanent change in compensation, putting more money in the employee's pocket every payday for the entire duration of his employment.

Regards,

UJ Consulting