Overview

An incentive plan is one that rewards top performing individuals, groups or teams. It is used by organizations worldwide to promote meritocracy across an organization. Incentive plans are very powerful tools and it is important to understand how they are to be deployed in an organization. Many organizations that have deployed incentive plans with care have managed to encourage meritocracy and control manpower costs.
 
The range of incentive plans is really wide. One can have incentive plans that have a long term, medium term or short term focus. There are incentive plans that address individual performance, group performance or organization performance. Good incentive plans follow the KISS strategy i.e. Keep It Simple for Stupid.

Typical objectives of an incentive plan are:

• Defining high standards to drive employee behavior for providing exceptional customer experience for each of its customers
• Recognizing good work being performed by employees. This involves defining standards for good work for each business
• Employees should feel part of a strong brand which encourages performance, creativity and values