Existing Employees - Retention bonus vs Performance Bonus

August 31, 2022

by a searcher from Clemson University in Columbia, SC, USA

Hi All,
Does anyone have experience offering existing employees a yearly retention bonus after acquisition (think yearly bonus for 3 years for staying with a company)?

This is for key employees in the current business. I have read multiple mixed reviews on retention bonus and am leaning towards a performance bonus that orients the team towards growing the business instead of just "staying onboard".

Thank you,

Reply by a searcher
from UNSW Australia in Sydney NSW, Australia

I would think a retention bonus would be effective only within a one year period. Within that time frame you want to hold on to institutional knowledge and get yourself up to speed. Beyond that you would be more focused on organisational performance and would want a more comprehensive performance incentive system.

Reply by a professional
from University of Texas at Austin in Houston, TX, USA

I feel like the purpose of a retention bonus is to help a new buyer not miss a step in the operations and growth.

I think a performance bonus is a great idea to more closely align goals (even better than retention).

+3 more replies.

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