What Is a Bonus Scheme?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 02 October 2019
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Also known as an incentive scheme, a bonus scheme is a strategy that is used by companies in two different ways. One approach is focused on motivating employees in the workplace, up to and including offering incentives that help to keep employee turnover at a minimum. A second application of the bonus scheme is focused on consumers, with the goal of attracting and keeping customers by motivating them to buy more of the supplier’s offerings. Both approaches focus on offering something to the target audience that is above and beyond what is considered standard, creating an incentive to continue the relationships.

As it related to employee motivational programs. A bonus scheme will often involve creating some sort of short- or long-term event that offers a reward above and beyond the salary, wages, and standard benefits that employees enjoy. For example, sales personnel may be offered the incentive to increase sales to a certain level in order to qualify for a chance to receive an extra week of paid vacation time, or even an all-expense paid vacation to a desirable destination. The incentives offered to different levels and departments of employees would be in line with their duties and would offer something that would provide a desirable benefit. Even simple bonuses like free meals at local restaurants or a paid day off may be used as part of this motivational approach.


In terms of marking strategies, a bonus scheme normally has to do with strengthening ties with consumers so they receive some sort of additional benefit from purchasing the goods or services offered by the company. At times, this may involve partnering with others to offer some sort of additional incentive. This means that the producer of a line of ketchup and other condiments may pair with a bakery to offer customers incentive to purchase a certain number of products in order to also receive a free loaf of bread or a pack of hamburger buns. In like manner, companies may offer discount coupons or reward programs that can be redeemed later on for merchandise that consumers find attractive.

In any incarnation, a bonus scheme is designed to benefit specific recipients and allow the company to in turn receive some return on their efforts. As it applies to employees, the company benefits from happier employees who tend to be more productive, which in turn increases the profit margin of the business and also helps to encourage valuable employees to remain with the employer. As a marketing tool, a bonus scheme can increase consumer awareness, build strong relations between supplier and customer, and also increase the chances of good word of mouth that in turn increases business volume.


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