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We start by setting out what counts as a “bonus” in legal and HR terms, and the way bonuses sit alongside primary pay and other variable reward. It explains the difference between contractual and discretionary bonuses, how “custom and practice” can turn a voluntary bonus right into a binding entitlement, and what you should do to deal with part-time and fixed-term employees fairly. Used nicely, a bonus scheme can drive efficiency, assist retention and help position the organisation as a competitive employer in its market. Bonuses are actually a core part of many UK employers’ reward methods, not simply an extra fee at yr end.
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