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Are You For or Against Sign On Bonuses?

Joe Marconi

By Joe Marconi
in Human Resources, Employees

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bantar Community Regular

bantar

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For my heavily bonused employees, I will offer a sign-on bonus that gets the to the next pay period.  They may be in a full salary role.   The last one I did said:  Salary + $400 bonus paid weekly thru XX date.   Then, monthly bonus from that point forward.  This kept their salary at a competitive level until their earned bonus kicks in.  The bonus was less than he would make hitting goals, so there is an incentive to have next month's payout bigger and better.    NOTE: This is not a true sign-on bonus, but shows a method of implementation.   It is implemented in weekly chunks so that if it falls apart, the business is protected and spends less on that hiring mistake.

I've received bonuses in the past which had "claw-back" clauses.   If I didn't meet the time commitment, it would be demanded back.  I've made similar offers. 

If possible, I think it's best to avoid sign-on bonuses as a main-attraction.  If this person leaves their current job for the bonus, will he leave here for the next bonus?   You would prefer to have someone selecting their next job for better reasons.  However, if adding a sign-on bonus helps you close a deal-that-you-like, then go for it. 

I'm a fan of structuring any bonus payout with a time commitment or earned over time vs a day-one payout.   Sometimes that new hire does not pan out and it can be hard to claw-back what is already spent.

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bantar Community Regular

bantar

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Always private.  It's a temporary measure to accomplish a goal.   He who gets extra money is generally happy.  Others are oblivious.   But for the one receiving it, it is in writing... for 2 reasons:  1) So that the person understands what is happening and 2) So that I don't forget what I promised.

Expand this thought beyond me:   You raise a good question.  If you are going to paper the neighborhood with BIG SIGN-ON BONUS, how is this received by current employees when the are not getting a bonus?   They would be thinking that maybe they should leave to get one themselves.   It's likely that I could get away with a sign-on bonus in an Indeed Job Posting that no one would hear about, but it's also likely that a technician's friend was looking for a job and saw my bonus.  You'd need to be prepared for this conversation... 'cause it is a small world. 

If the techs are overworked and would be thrilled to have another tech, they might be all for it.   But probably not.

bantar Community Regular

bantar

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2 hours ago, Transmission Repair said:

I was never a fan of a sign-on bonus.  Instead, I would advance the their first week's pay.  That worked for me.

Not sure how this helps them?   With weekly pay, you're first check arrives at the end of the 2nd week.   If you are accelerating their first EARNED paycheck, then there is a 2 week gap until the next earned paycheck.  If you are paying them for a week that they did not earn, then you are indeed paying them a sign-on bonus, but not calling it such.   It must be the latter.  

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