Anatomy of an Employee Bonus

Bonus as employee retention tool
"If you want to keep employees motivated and focused, and you don't want them to start looking to jump somewhere else just for a couple of dollars, you might say 'what can I do to make this stop and can I do something outside my normal merit increase or compensation program?" says Slutsky.

The key, of course, is to maintain balance with the financial objectives of your organization.  

"We can afford to do this because we meet the benchmarks in nonprofit labor costs, but we are also cognizant of our role in financial stewardship for providing charitable care to the community," says Heller.

"This wasn't a sort of cushion before the blow. We have a commitment to employee job security and haven't had massive layoffs... so this wasn't a premonition of bad things to come. It really helped to better position our compensation strategy toward how our leaders are compensated."