Want to know how to make your employees feel valued? Select a bonus letter example that truly speaks to them with our template and guide.An incentive bonus agreement is a contract between an employer and employee that details information about a cash bonus offered as an incentive. State agencies may use recruitment or retention bonuses to provide additional financial incentives to attract, hire or retain eligible key classified staff. This bonus announcement sample letter may be used as a memo to all workers or to an individual employee. What is a Bonus Plan? A bonus plan is an agreement between the employer and employee to pay out a predetermined amount of money based on performance. A total rewards package that incorporates a variety of strategies, including a one-time merit payment and paid time off for outstanding performance. This employee bonus policy template is ready to be tailored to your company's needs and can be a starting point for setting up your employment policies. It conveys appreciation, acknowledges hard work, and instills a sense of pride in the recipient.