retention bonus

A retention bonus is a financial incentive, usually paid out as a lump sum, offered by an employer to a valuable employee to encourage them to stay with the company for a specified period of time. This type of bonus is typically used when the continuity of the employee’s service is considered crucial to the organization’s success or stability.

Retention bonuses are common during mergers, acquisitions, periods of significant change or transformation within the company, or when there is a high demand for skilled workers in the job market, making it easy for employees to find alternative employment.