Ultimately, your retention bonus contract should benefit both you and the employees you want to keep. By offering a bonus, you can encourage your best talent to maintain themselves and help you achieve your business goals after a merger or buyout. At the same time, you reward the commitment of your employees. This agreement must be solid and easy to understand. So be sure to talk to your legal team before you offer it, and even tell your employee to check with his or her lawyer. The last thing you want to have right after a big business event like a merger or acquisition is to end up in court. Imagine that a retention bonus agreement is the opposite of a severance agreement. While a compensation agreement involves payment if the employee agrees that they have been terminated fairly, the retention bonus contract offers them a payment to remain fixed. Then you want to go straight into what is in this letter: the offer of a conservation bonus agreement. We advise you to get straight to the point: you must make sure that the amount you are willing to spend on the retention bonus contract is enough to induce the person to accept the offer without hurting your end result, which can feel the heat of all the turnover that can arrive during an M-A. Want to learn more about retention bonus agreements? Download our example here: all these things need to be mentioned in the conservation bonus letter so that your co-worker fully understands what you`re offering them. The last thing you want is to either confuse your employee and is not willing to accept the offer, or let countless employees arise with simple questions that you may have answered in an email/agreement.
SHRM quickly passes over everything and keeps the letter flowing. They cover the person`s title, management expectations, those of the supervisor, the person`s salary, the duration of the agreement, the bonus and the time of payment. One way or another, you need to fully understand the financial side of the bonus before offering the incentive to your employees. However, we advise you to reach an agreement during the early stages of the merger or acquisition, so that you can fill out areas later, so that you have registered a document and are ready to send it. From there, you need to address some finer details that go beyond what happens when the person is terminated during the storage contract. According to SHRM, employers generally pay retention bonuses to sacked employees based on the length of time they worked under the agreement. If we do not, let`s talk directly about how you can make one of these agreements to make sure it does everything you need. The bonus works every year, which means that the employee has spent one year of the agreement, which entitles him to this payment.