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They is often a cost-effective method to reward workers because they provide employers flexibility to reply to financial conditions without committing to a long-term pay rise. HR groups need to know how to pro-rate bonuses correctly and tips on how to avoid standards or guidelines that put sure groups at an obstacle, for example staff on maternity depart or different family leave. A key theme throughout is the difference between a contractual bonus, which creates a legal right to payment when standards are met, and a discretionary bonus, where the employer retains some flexibility over whether to pay and in what quantity.

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