Bonus Tool

Understanding Your Bonus Program

Your bonus program is designed to recognize your contributions, performance, and the company’s overall results during a specific bonus cycle. The Bonus tool helps make the process more consistent and transparent by using approved company rules, performance outcomes, eligibility criteria, and bonus plan details to calculate a recommended bonus amount.

Integrated Bonus Tool

The Bonus tool helps manage the bonus process in one place. It helps calculate your potential bonus based on the bonus plan you are part of.

It may consider factors such as:

• Your eligible earnings for the bonus period
• Your target bonus percentage
• Your performance rating or outcome
• Company performance for the cycle
• Any applicable eligibility or proration rules
• Final review and approval by leadership, HR, or Finance

The tool does not randomly assign bonuses. It follows the company’s approved bonus rules for the cycle.

How is my bonus determined?

Your bonus usually starts with your target bonus opportunity.

This is the amount or percentage your company uses as the starting point for your bonus calculation. From there, your final bonus may be adjusted based on the bonus plan rules for the cycle.

Common factors may include:

• Your eligible earnings
• Your target bonus percentage or amount
• Your performance rating or performance outcome
• Company performance
• Eligibility rules
• Role, level, location, or department
• Final review and approval by the company

Your company decides which factors apply to your bonus plan.

How does performance affect my bonus?

Your performance outcome may be used to determine the individual performance portion of your bonus.

For example, employees with stronger performance outcomes may receive a higher performance multiplier, while employees who did not meet expectations may receive a lower multiplier or may not be eligible for a payout, depending on company policy.

Your performance result is usually finalized through the company’s performance review and approval process before it is used for bonus calculation.

How does company performance affect my bonus?

Some bonus plans include a company performance factor.

This means the final bonus is not based only on individual performance. It may also reflect how the company performed against its goals for the cycle.

For example, if the company exceeded its goals and delivered stellar earnings, the company performance multiplier may increase the bonus payout. If the company performed below target, the company performance factor may reduce the payout.

What is Performance to Potential?

If your company uses Performance to Potential, it helps leaders look at both current performance and future growth potential.

Performance reflects what you delivered during the cycle.

Potential reflects future growth, readiness, or ability to take on more responsibility.

This may be used to support talent conversations, development planning, retention planning, or bonus review discussions, depending on your company’s process.

Sample Bonus Calculation

Here is a simple example of how a bonus may be calculated in the Bonus tool. In this example, the employee’s target bonus amount is $8,000.

The employee received a strong individual performance result, so they received full credit for the individual performance portion of the bonus. However, company performance for the cycle came in at 95%, which applied a lower company performance multiplier.

After both individual performance and company performance were combined, the employee’s final recommended bonus is $7,200.

Calculation Breakdown

Formula:

Eligible Bonus Earnings × Target Bonus % ×

[(Individual Weight × Rating Payout %) + (Company Weight × Company Performance Multiplier)]

Using the sample values:

$80,000 × 10% × [(50% × 100%) + (50% × 80%)]

First, the target bonus amount is calculated: $80,000 × 10% = $8,000

Then, the individual and company performance portions are combined:

(50% × 100%) + (50% × 80%)

50% + 40% = 90%

Finally, the target bonus amount is multiplied by the combined payout factor:

$8,000 × 90% = $7,200

Final Recommended Bonus: $7,200

This amount may still be subject to review and approval based on your company’s bonus process.

Why might my final bonus be different from my target bonus?

Your final bonus may be different from your target bonus because of:

• Individual performance results
• Company performance results
• Eligibility rules
• Role or salary changes
• Bonus plan rules
• Manager, HR, Finance, or leadership review

The target bonus is the starting point. The final bonus is confirmed after the full review process is complete.

Key things to remember

• Your bonus is based on your company’s approved bonus plan rules.
• Your target bonus is a starting point, not always a guaranteed payout.
• Your final bonus may be adjusted based on performance, company results, eligibility, and approvals.
• Amounts shown as estimated or recommended are not final until the review process is complete.

Who should I contact with questions?

If you have questions about your bonus, eligibility, performance result, or payout timing, please contact your manager or HR team. They can help explain your company’s specific bonus process and how it applies to your situation.