Zero-based Bonus

Zero-based Bonus is a bonus system where incentives or compensations are given to employees based on performance rather than seniority. The ‘zero-based’ refers to the performance evaluation that starts from a zero baseline. To be eligible for this compensation, employees must meet a predefined set of goals allotted to them. The bonus will be paid to the employees on a quarterly or annual basis. The zero-based bonus approach aims at motivating employees to achieve organizational goals by rewarding their efforts with suitable remunerations. Unlike the traditional approach, a zero-based bonus system does not consider factors like length of service or designation for eligibility.