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Simple English definitions for legal terms
incentive pay plan
Read a random definition: per rescriptum principis
A quick definition of incentive pay plan:
Incentive Pay Plan: A way of paying employees more money when they work harder and do a better job. This encourages them to be more productive and do their best work.
A more thorough explanation:
An incentive pay plan is a type of compensation plan that rewards employees for increased productivity with higher pay. This means that the more work an employee does, the more money they can earn.
- A salesperson who earns a commission on each sale they make is an example of an incentive pay plan. The more sales they make, the more money they earn.
- A factory worker who earns a bonus for meeting or exceeding production goals is another example of an incentive pay plan. The more they produce, the more money they can earn.
These examples illustrate how an incentive pay plan can motivate employees to work harder and be more productive. By offering a financial reward for increased output, employees are encouraged to put in more effort and achieve better results.