What is Incentive Pay?

Incentive pay is a reward payment devised and paid to an employee for a peak performance which has resulted in high yield in driving and pushing the business ahead, especially during challenging times. Incentive pay is aimed at keeping the staff motivated and encouraged to bring up similar high-yielding performances up ahead.

Incentive payment is a financial payment and is not paid for working for a specific time period. The idea behind incentive pay is that a reward payment shall motivate employees to reproduce their performance, the one which resulted in them being rewarded with the incentive.

Apart from financial incentives, non-financial incentives are also there which are called as casual incentives. Casual incentives include things like taking the employee out for lunch / dinner, rewarding the employee with a gift, etc.

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