How to implement and manage a discretionary bonus scheme
Author: Claire Birkinshaw
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- Draw up a set of bonus scheme rules specifying the bonus scheme to be non-contractual.
- Carefully consider the requirements for eligibility for a bonus.
- Set out in detail the key performance conditions that must be met in order for a bonus to be paid.
- Subject to legal requirements, consider whether bonuses are to be paid to employees on maternity and long-term sick leave.
- Once it has been implemented, actively manage the bonus scheme.
- Ensure that discretion as to payment of a bonus is exercised fairly and reasonably and not arbitrarily.