Bonus system

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Bonus system is a form of incentive compensation whereby employees and/or managers receive a year-end or period-end reward, usually cash, based on some organizational performance criteria such as sales, profit, production efficiency, quality, and safety; used to motivate individuals to support strategy-implementation efforts.

Definition

According to the Strategic Management by David and David (15th edition),

Bonus system. A form of incentive compensation whereby employees and/or managers receive a year-end or period-end reward, usually cash, based on some organizational performance criteria such as sales, profit, production efficiency, quality, and safety; used to motivate individuals to support strategy-implementation efforts.