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This question is about retention bonus.
What is a retention bonus?
A retention bonus, also referred to as retention pay or a retention package, is a lump sum of pay in the form of a bonus that an employer gives an employee to get the employee to stay at the organization for a particular period of time.
In general, retention bonuses tend to be fairly large sums of money, they average in the range of 10% to 25% of the specific employee's base compensation. One factor that affects the amount of an employee's retention bonus is the amount of time the employee agrees to stay at the company.
Retention bonuses are more commonly found in large companies and corporations, those with staff rosters of +20,000 employees. Retention bonuses are seldom found in smaller organizations and small businesses. Retention bonuses are utilized by large companies across the spectrum of industries.
This form of a bonus is also most often offered to senior-level employees, employees whose job performance is outstanding, and other key employees. Retention bonuses often happen during turbulent times for a company, in situations like;
Mergers
Acquisitions
During large projects
Important times of production
Companies also utilize retention bonuses to keep other companies from stealing, or poaching, their most prized employees and executives.
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