Normally, a bounty is issued by a Government official or by the Marines. The idea is to tempt others into aiding the capture of the criminal so they can be brought to justice quickly.
A bounty reflects both the threat and power of an individual. Engaging in activities deemed criminal by the World Government or associating with groups which engage in them is enough to warrant significant bounties, even if the criminal is not powerful themselves. In particular, direct opposition to the World Government, no matter the reason, is treated as a serious offense, and bounties are issued accordingly.
After a bounty is issued, it can later be increased for several reasons:
1-The threat of a person’s observed combat abilities.
2-More experienced bounty hunters volunteering to capture the individual or group.
3-Further criminal acts beyond the initial one.
4-Inspiring criminal acts when provoked or inciting others to act ‘criminally’.
5-Having knowledge deemed illegal by the World Government.
6-Solely being associated with a notable criminal figure.
Here are the 50 Highest Known Bounties ever in One Piece:
Gol D. Roger ฿5,564,800,000
Edward Newgate ฿5,046,000,000
Charlotte Linlin ฿4,388,000,000
Marshall D. Teach ฿3,996,000,000
Dracule Mihawk ฿3,590,000,000
Monkey D. Luffy ฿3,000,000,000
Trafalgar Law ฿3,000,000,000