A system for determining supplemental compensation distributed four times per year often involves specific metrics, such as sales targets or performance goals. For example, a system might calculate a bonus as a percentage of sales exceeding a predetermined threshold, or award a fixed amount based on the achievement of specific objectives.
Such systems can be valuable tools for motivating employees and aligning their performance with organizational objectives. They provide a clear link between achievement and reward, fostering a performance-driven culture. Historically, bonus structures have evolved from simple profit-sharing models to more complex systems incorporating individual, team, and company-wide performance indicators.