As a business owner, you are legally required to pay your employees at least the federal or state minimum wage (depending on where you are); you are not mandated to give bonuses or salary increases. Traditionally, employers give salary increases and bonuses as an incentive to valued employees. However, more and more employers are paying bonuses rather than salary increases.
Many companies are shifting from traditional salary increases, stating that employees have to earn it as a bonus instead. Because these bonuses are performance-based, only the most productive employees will receive it.