Definition
A payment incentive designed to keep critical employees from leaving during uncertain periods, paid upon reaching a specific future date. Bribery with a vesting schedule.
Example Usage
They're offering retention bonuses to keep everyone through the merger, because nothing says 'we value you' like paying you extra to not flee while we decide your fate.
Origin
Became common during the merger wave of the 1980s-90s as companies struggled with talent flight during transitions
Fun Fact
Retention bonuses often backfire—once employees receive the payout, they immediately leave anyway, having been job searching during the retention period while collecting the bonus.
Source: Retention management and change management practices
Related Terms
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See “retention bonus” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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