Bonus plans are a popular way to reward employees for their performance. They can be a great way to motivate employees, improve performance, and align employee goals with company goals. However, there are many different types of bonus plans, and it can be difficult finding the best bonus program for your organization.

Finding the best bonus program 
for your organization

Choosing the best bonus plan for your organization is a crucial decision that can significantly impact employee motivation, engagement, and retention. With various options available, it’s important to consider your organization’s unique needs and goals when selecting the most suitable bonus plan. In this blog post, we will explore different types of bonus plans and discuss key factors to consider in determining the best fit for your organization.

Finding the Best Bonus Program for your Organization

  • Performance-based bonuses: Performance Based Bonuses are a common and effective way to reward individual or team achievements. They are tied directly to performance metrics and can motivate employees to excel in their roles. Performance-based bonuses work well when the organization’s objectives are measurable, and individual or team contributions directly impact those objectives. They are particularly effective for sales teams or roles with clear, quantifiable outcomes. Plentive has built several guides to help your company build a better bonus plan. Head to our FREE template page now to download the template related to your industry.
  • Profit-Sharing Plans:

Profit-sharing plans distribute a portion of the company’s profits among employees. This type of bonus plan aligns employees’ efforts with the organization’s financial success. Profit-sharing plans can foster a sense of shared ownership and commitment to the company’s performance. They work best when employees have a direct impact on the organization’s profitability, and the organization has a consistent track record of generating profits.

  • Discretionary Bonuses:

Discretionary bonuses are awarded at the discretion of management based on subjective assessments. They can be used to recognize exceptional performance, outstanding contributions, or to incentivize specific behaviors aligned with the organization’s values. Discretionary bonuses provide flexibility but may be less predictable for employees. They work well in organizations where individual efforts and achievements may not be easily quantifiable or when customized recognition is desired. Learn the difference between discretionary and non discretionary bonuses.

  • Spot Bonuses:

Spot bonuses are unplanned, one-time bonuses given for exceptional performance or unexpected contributions. They are designed to provide immediate recognition and reinforcement of desired behaviors. Spot bonuses can be an effective way to motivate and retain employees by offering timely rewards. This type of bonus plan works well in fast-paced environments where employees frequently go above and beyond their regular responsibilities. If you’re interested in spot bonuses we have a spot bonus policy that we suggest downloading to implement into your bonus plan.

  • Team-Based Bonuses:

Team-based bonuses reward the collective performance of a group or department. They foster collaboration, encourage teamwork, and create a sense of shared responsibility for achieving shared goals. Team-based bonuses work best when collaboration and cooperation are critical to the organization’s success, such as in project-based environments or cross-functional teams. We often say, “Teamwork makes dreamwork.” Schedule a demo with us today for guidance on how to implement team bonuses seamlessly.

Key Considerations for Choosing the Best Bonus Plan:

  • Organizational Culture and Values: Select a bonus plan that aligns with your organization’s culture and values. Consider whether individual or team recognition is more valued and whether the focus should be on financial performance or broader contributions to the organization. Some bonus plans are more aligned with certain company cultures than others. For example, a company with a highly competitive culture may be more likely to use individual performance bonuses, while a company with a more collaborative culture may be more likely to use team performance bonuses.
  • Clear Performance Metrics: Determine if your organization has clear, measurable performance metrics that can serve as the basis for a performance-based bonus plan. Align the bonus plan with these metrics to ensure fairness and transparency. We work with KPI’s. If you’re having a hard time creating KPI’s that are effective and motivate download our guide to help you create them here.
  • Budget and Financial Feasibility: Consider your organization’s financial situation and ability to allocate funds for bonuses. Ensure the chosen bonus plan is financially sustainable and aligned with your budget constraints. Creating a performance based bonus takes out the guess work of whether or not you can afford it. Your company pays out, when jobs are completed.
  • Employee Preferences and Feedback: Seek input from employees through surveys or discussions to understand their preferences regarding bonus plans. Their insights can provide valuable guidance in choosing a plan that resonates with their needs and motivations. We love Plentive’s live dashboards that have real time results and provides valuable feedback for employees.
  • Industry and Competitive Landscape: Research bonus practices in your industry and consider the norms and expectations. Understanding what competitors are offering can help you design a competitive bonus plan to attract and retain top talent.  Plentive offers templates for a variety of industries for your benefits.
  • Be flexible: Your bonus plan may need to be adjusted over time as your company changes. Be prepared to make changes to your bonus plan as needed.


There is no one-size-fits-all answer to the question of which is the best bonus plan to use. The best bonus plan for your company will depend on your specific needs and goals. By considering the pros and cons of different bonus plans, you can choose the best bonus plan for your company.

If you are looking for a bonus plan that promotes teamwork and collaboration, then a team performance bonus may be a good option. If you are looking for a bonus plan that aligns employee goals with company goals, then a company performance bonus may be a good option. If you are looking for a bonus plan that motivates employees to stay with the company for the long term, then a long-term incentive bonus may be a good option.

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