incentive pay scheme
incentive pay schemeany form of PAY system which rewards an employee or group of workers in such a way as to induce increased effort or production. Such reward systems include PIECEWORK PAYMENTS which are geared to an individual's or group's effort and output; BONUS SCHEMES which provide bonuses for reaching stipulated levels of production or sales;
PROFIT-RELATED PAY systems and PROFIT SHARING schemes which provide for employees to receive a proportion of the firm's profits. See INCENTIVE BONUS SCHEME, PERFORMANCE-RELATED PAY, EXECUTIVE SHARE OPTION SCHEME, LONG-TERM INCENTIVE PLAN, EMPLOYEE SHARE OWNERSHIP PLAN, PRINCIPAL-AGENT THEORY.