Advantages of Retention Bonuses

Subject: Employee Management
Pages: 1
Words: 287
Reading time:
2 min
Study level: College


Companies need employees, which makes organizations rely on various bonuses and appropriate incentives to attract and retain individuals. Signing bonuses motivate new workers to enter a company, while retention ones provide individuals with a financial incentive to stay with the organization. Some people believe that retention bonuses cause internal conflict, while others highlight the potential benefits of using this incentive. Thus, credible evidence demonstrates that retention bonuses positively affect employee behavior.

Main body

It is necessary to highlight that retention bonuses provide an organization with essential advantages. Firstly, a study by Yang (2019) has found a positive correlation between such an incentive and employee productivity. This claim refers to the fact that these bonuses make individuals more motivated to achieve the stipulated goals. If this environment is present, workplace conflict is less probable because employees focus on reaching a shared goal. Secondly, Bhasin (2020) mentions that retention bonuses will not lead to any disadvantages if they are adequately implemented. In particular, it is essential to offer such incentives to talented and skilled workers (Bhasin, 2020). In this case, employees will appreciate the bonuses, which can positively impact their connection to the organization. Consequently, employers should wisely offer retention bonuses to maximize their potential benefits.


In conclusion, the presence of arguments for and against the use of retention bonuses denotes that one should investigate the issue. The identified evidence has demonstrated that these financial incentives can increase employee productivity and lead to retaining high-performing workers. These positive outcomes are available if employers correctly implement the approach, meaning that the bonuses should only be offered to high-performing and talented employees. The potential positive effects will be maximized in this case, which will be beneficial for an organization.


Bhasin, H. (2020). Retention bonus – Definition, steps, advantages, disadvantages. Marketing91. Web.

Yang, F. (2019). Peer-dependent incentives and prepaid bonuses: An experimental investigation of productivity improvement. Journal of Behavioral and Experimental Economics, 81, 152-163. Web.