A Quantitative Algorithm Model for Bonus Allocation

ABSTRACT A bonus allocation is very meaningful to the company's survival and long-term development: If top management receives a larger proportion of the total bonus and employees receive less, employees will lose motivation in daily operations. In business, it is the board of directors who discusses determining top management's annual bonus. Discussion, belonging to the qualitative approach, may involve questions and bias. Since there is lack of quantitative models for bonus allocation in literature, we propose a quantitative algorithm model to share bonus between employees and top management. At the end of this paper, an example is given to illustrate how to allocate bonuses between these two parties. Keywords Quantitative algorithm model, Righteous, Bonus allocation