What is a Signing Bonus
These can be referred to as special monitory incentives to highly skilled employees who join the company. This is in addition to salary paid to them. These are usually given to an employee to attract them to perform more than what they are asked for. These bonuses are mostly offered to management level positions with skills that are hard to find in the job market.
The rate of this Signing bonus may very as per the company policies; sometimes it can also be fixed as per the technical skill the prospective employee possesses. In designing a Signing bonus structure the company must take at most care. The company must keep a check that the employee does not leave the organization or if he does not perform up to the expectations. To guard against such risks, the company must make the potential candidate to sign a legal document noting the amount of bonus he or she is paid acknowledging the same.
It is advantageous to the employer and employee; an employee can bond the gap between the salary and the bonus that is offered to him. On the other hand an employer can pay a one time pay to the employee with no extra added costs to the revenue of the company. Signing Bonus also depends on the economy of the country, if the labor market is very skintight it would always be better to go for Signing Bonuses for both the parties.
Let’s see what are the points to keep in mind if one has to go ahead with a Signing Bonus:
- Research work: this has to be done by both the employee and the employer to find out the prevalent rates in the job market. Employees can also discuss with the present employees in the organization to see if any signing bonus have been paid to them.
- Wait for the offer: it is advisable for the employees to wait until an offer is made in black and white. Because without knowing the offer the employee cannot discuss the terms and conditions. If he or she is in a hurry to finalize the offer, chances are more the they might lose the job itself.
- Evaluation of other expenses: this holds well both for the employer and employees. As far as the employee is concerned he or she should calculate the transportation costs to and fro to the company, relocation expenses if any etc. From the company’s point of view it should take that it does not cross the revenue mark allocated for signing bonuses to be made.