Employee Bonuses as a Stimulating Factor for Productive Labor

Abstract

The relevance of the topic of the article stems from the ongoing significance of remuneration in both scientific and practical discourse. While the general aspects of remuneration — its structure and essence —have been widely studied, the application of specific remuneration elements as methods to stimulate employees has received less attention. This applies in particular to the system of stimulation by establishing qualitative and quantitative indicators of the efficiency and productivity of employees in performing their duties. This article aims to address this gap by examining the application of Key Performance Indicators (KPIs) and the allocation of company shares as distinctive tools for incentivizing employees towards higher productivity.) For this purpose, formal-logical, comparative, analytical and synthetic research methods are used. The authors conclude that bonuses based on KPI performance are a promising way to motivate employees and are designed to improve labor efficiency at the enterprise through material incentives for employees. Integrating KPIs into the remuneration system enables a clear differentiation of employee performance levels. For the KPI system to be effective, it must be absolutely transparent. A performance evaluation scheme must also be created, with the help of which employees will be motivated to achieve results. In order to fairly calculate payments based on KPI, all payments to the employee should be taken into account. The article also explores the distribution of company shares among employees as an increasingly popular mechanism for employee rewards. One notable advantage of this approach is that the original owner retains ownership of the shares while linking employee remuneration to dividends. Another model involves the sale of shares with options, either incorporated into the share purchase and sale agreement or established through a separate agreement. These mechanisms offer innovative pathways to align employee incentives with the company’s success, fostering enhanced productivity and engagement.