Incentive Compensation

Definition

Performance-based pay intended to motivate employees. Studies show it actually causes anxiety and internal competition instead.

Example Usage

Our incentive compensation structure rewards sales numbers, which is why the sales team doesn't help each other and we have high turnover.

Origin

Management theory from the 1960s emphasizing performance metrics

Fun Fact

Intrinsic motivation (autonomy, purpose, mastery) consistently outperforms incentive-based motivation for complex work

Source: Compensation and benefits terminology

Related Terms

Intermediate

Employer Value Proposition (EVP)

The carefully crafted fantasy of what makes your company a great place to work, which differs significantly from the employee value proposition (survival and a paycheck).

👥 Human Resources

Intermediate

cultural add

A hiring philosophy focusing on candidates who bring new perspectives and diversity rather than simply fitting existing culture. The enlightened evolution of 'culture fit' after everyone realized that just meant 'people like us.'

👥 Human Resources

Beginner

total rewards package

HR speak for 'your salary is disappointing, but look at all these other things!' A combination of pay, benefits, and perks designed to distract you from the fact that your base compensation hasn't kept up with inflation.

👥 Human Resources

Intermediate

Workload Distribution

The allocation of work tasks across team members—often grossly unequal and never actually addressed despite anonymous survey complaints.

👥 Human Resources

Intermediate

salary benchmarking

The practice of comparing your compensation levels against market data to ensure you're paying competitively. The corporate version of checking if you're getting ripped off.

👥 Human Resources

Beginner

personnel

The fancy French word for "employees" that makes Human Resources sound more sophisticated when discussing the people they're about to reorganize. This term encompasses everyone on the payroll, from interns to executives, united in their shared experience of mandatory compliance training. It's the collective noun that reminds you that you're not a person, you're a resource.

👥 Human Resources

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