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Performance Incentives

Employees that have performance incentives as part of their compensation package need to earn their bonuses or other form of incentive compensation.

In some organizations, incentive compensation is too loosely tied to performance and payments are made regardless of performance. This sends a very bad message in terms of accountability. When performance does not meet the minimum requirements for payout under an incentive compensation arrangement, there should be no payout.

Incentive compensation should be designed to incent the employee to participate in enhancing bottom line performance of the company in various ways.