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They can be useful in certain cases, for example, to encourage employees to stay through a merger or acquisition or through the completion of a key enterprise project. Retention bonuses can also be a useful tool to keep employees during a hot talent market.

The cons of accepting a retention bonus offer That could cause lingering problems and make it more likely that they will look for ways to replace you in the future. If your career plans are hindered by staying in your job, the money may not be worth that delay in reaching your goals.

Thank you very much for the generous bonus offer. I believe the amount is appropriate, though I would like to discuss the retention period. I would be more comfortable with an 18-month retention period instead of a 24-month period.

What Is an Employee Bonus Plan? An employee bonus plan provides compensation beyond annual salary to employees as an incentive or reward for reaching certain predetermined individual or team goals. The purpose of bonus plans is to provide recognition for employees who go above and beyond normal work obligations.

A retention bonus, also called retention pay or a retention package, is a lump sum of money a company pays to an employee to stay with the company for a specific amount of time. Usually, retention bonuses are sizable amounts of money, ranging from 10% to 25% of an employee's base pay.

It's a sign that you're valued. If you needed a boost to your morale, a retention bonus offer may be just what the doctor ordered. After all, companies don't make these offers to every employee, so if you receive one then you can rest assured that your company values your employment. There may be room for negotiating.

Consider whether you want to stay with the company that issued the retention bonus. Determine whether you are OK with passing up other opportunities for the set amount of time in the agreement. Weight the pros and cons before accepting it. Negotiate the bonus if you decide to accept it.