What is the term for bonuses that are announced to employees to encourage them to work more steadily, rapidly, or efficiently?

• A. Signing bonus
• B. Non-discretionary bonus
• C. Merit bonus
• D. Performance bonus

Answer: (B)

Non-discretionary bonuses are set up in advance as part of the compensation plan and are paid when defined targets for productivity, speed, or efficiency are met. They’re designed to motivate employees by making the payout predictable and tied to specific criteria, so workers have a clear goal and know there will be a payout if they hit it. This differs from bonuses that are given at management’s discretion or for signing or overall performance. A signing bonus is a one-time recruitment incentive, a merit bonus is typically tied to performance in a way that can be discretionary, and a general performance bonus often depends on managerial judgment or subjective assessment rather than fixed criteria.