What is the long -term motivational plan?

A long -term motivational plan includes a company that gives employees a bonus as a reward for excellent work performance or providing employees' bonuses based on the length of the service. According to the long -term plan, the employee can often start accumulating rewards based on the short term, but does not accept these incomes until some time in the future. Most long -term service plans include employees who have to wait at least one year before receiving bonuses, and many plans include employees who have to wait for at least five years to fully receive. People who work in the financial sector and sales must bring results over the years, preventing people from sales in the first years, because such steps would be detected long before the incentives were paid. They offer both short -term and long -term motivational plan and it is based on the results of the former, although the rewards are much more important in the long -term plan.

According to the conditions of the long -term plan of motivation, employees usually receive their bonuses in the form of cash, company shares or profit. Cash bonuses are paid together with regular salary of employees to the date of the plan. Shares incentives either include a company buying its own shares on behalf of an employee or a company that provides employees the opportunity to buy shares for the market rate below. The plans that include stock options rely on the assumption that the value of the company's shares increases over time than in autumn. Profit shares include an employee rewarded with a fixed percentage of the company's profits at a time when a long -term motivational plan applies.

Employees participating in long -term incentive plans often pay lower taxes on bonuses paid from these plans than for bonuses paid from short -term plans. This is because in many countries there is a long timeThe tax rate of capital revenues lower than the income tax rate in which short -term incentives are taxed. Long -term plans are often reserved for high -level employees and are designed to ensure that these key employees remain loyal to the company. In situations where the results of the company deteriorate over time, company employees may end with minimal rewards at the end of the long -term incentive plan.