Bank of Ireland is set to introduce staff bonuses from next year, following the recent easing of restrictions on bankers' pay.
The bank said it will introduce a performance-related Profit Share Scheme.
This will see colleagues rewarded by April 2024 based on both the financial and operating performance of the company and individual performance during 2023, it said.
The bank said the bonuses will be capped at €20,000, with a maximum award of 10% of an employee's salary.
Chief People Officer at Bank of Ireland Matt Elliott said the move will allow the bank to compete on a more level playing field with other employers.
"Looking to the future, and as a fully privately owned company, we also want to use an element of performance related pay to attract and retain the people we need to deliver great outcomes for customers and grow our business," he said.
At the end of last year, the Government approved plans to ease restrictions on pay and bonuses for staff at the banks that were bailed out by the Irish taxpayer during the financial crisis.
This is why banks are now allowed to pay bonuses of up to €20,000 to their employees.
Restrictions on non-pay benefits, such as private health insurance and childcare, were also lifted.
The current salary cap of €500,000 was removed completely from Bank of Ireland, which is no longer partially State owned.
The other bailed-out banks in which the State still owns a majority stake, AIB and Permanent TSB, will see the cap lifted when the State's shareholding reduces to a specified appropriate level in the future.
John O'Connell, General Secretary of the Financial Services Union, said today is a good day for staff in Bank of Ireland.
"The FSU was instrumental in getting the Government to lift the restriction on variable pay up to €20,000.
"We have been in negotiations with the bank since then on what the scheme will look like with our priorities to ensure that the scheme is fair, transparent, and treats staff at all levels equally.
"We are glad to announce that high level details of the scheme have been agreed, and staff will be eligible to get variable payments of up to a maximum award of 10% starting in 2024," he said in a statement.
The bank is also introducing a number of additional supports for staff, amid the ongoing cost of living pressures.
These include a cost of living payment, increases to entry level salaries, the introduction of a benefits allowance and a further base pay increase of 1.5% for this year.
While the bank made a cost of living payment last year, Mr Elliot said they understand that cost of living concerns have persisted into 2023.
"Therefore, we have proactively engaged with employee representative bodies on a number of pay enhancements to the previously-agreed arrangement for this year.
"This should alleviate some of the pressures which colleagues are experiencing currently," he added.
The bank said the cost of living payment of €720 in Republic of Ireland and £940 in the UK will be paid to staff in April.
These include improvements to parental leave, and leave for foster care, early pregnancy loss, fertility treatment, surrogacy, menopause and those suffering domestic abuse.
"As one of Ireland's largest companies and employers, with a strong international presence, our ambition is to make Bank of Ireland one of the best places to work," said Mr Elliot.
"We are doing this in a range of ways, including through progressive people policies and flexible working supported by a network of remote hubs," he added.
