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What are financial bonuses of employees?

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Financial bonuses are pleasant source of income and can significantly increase yearly fixed income part. Employers use bonuses to motivate employees and thank them for accomplished work at end of a financial year. However, not every employer ensures their employees with financial bonuses as it mostly depends on financial situation of a company.

Financial bonuses are pleasant source of income and can significantly increase yearly fixed income part. Employers use bonuses to motivate employees and thank them for accomplished work at end of a financial year. However, not every employer ensures their employees with financial bonuses as it mostly depends on financial situation of a company.

Who receives more?

Top level managers are those that get the best financial benefits among all profession levels. Paylab works in Latvia as salary information database Algas.lv administered by CV-Online and their survey reveals that bonuses can make up to 33% from their annual income. In Latvia’s job market, those kinds of bonuses make up to 25% of top manager incomes. Most commonly managers in Latvia are rewarded with monthly bonuses. It has to be outlined that in countries of Central and Eastern Europe the bonuses make on average one tenth of top level manager yearly income.

On the other hand, in Latvia financial bonuses make approximately 23% of low and middle level managers’ yearly income.

Most common bonuses

Among all bonuses most popular are monthly bonuses. Just this bonus can make up to a fifth part of employee’s fixed monthly salary. This bonus goes to assistants and service personnel, as well as specialists and top level managers.

The least common is Christmas bonus (sometimes referred as 13th salary). About 1% of respondents receive this bonus in Latvia.

Are financial bonuses necessary?

By giving a financial bonus to employee the employer shows recognition of accomplished works and employee’s value in the company. Bonuses motivate employees and encourage them to meet their goals and that in turn leads to a growth of company.

On the other hand, if bonuses are regular and make a part of employee’s monthly income, employee can get used to it and not see it as motivational factor. In any case, employer needs to point out the circumstances when the bonuses can be received and when can’t.

 

Article was created in collaboration with Paylab