Pro-rated Bonuses

Rockie

We did not give a salary increase this past year due to financial issues, but since things have improved, we have decided to maybe give out a type of "bonus" at the end of the year and then start over at the first of the year with performance reviews, etc.

Have any of you managed such a situation. How do you give this bonus out to people who have only been with the organization 2 months. Do you just come up with what the annual bonus would be and prorate it for two months, or what?

Any advice would be appreciated.

NeedCoffee

Yes, I would prorate it.

In order to avoid this type of situation, we give out a bonus only after a full year of service. However, this sometimes results in someone who starts employment in February having to wait 1 yr 11 months for a bonus. So, you may want to put a qualifier on your bonus that states you must have worked in the 6 months prior to the bonus in order for it to be awarded. Then, prorate the bonus for those who qualify.

Dutch2

Our program states that you must be employed between Jan 1 and May 31 in order to be eligible to pariticpate in the program for that year. We also pro-rate what the amount would be based upon the "full" months worked during the year. For example if you worked 9 full months, the ee would get 9/12 of the amount. Anyone hired June 1 or later must wait until the next year to be eligible to participate.