Incentive
An incentive is extra compensation paid to key employees to reward high performance. The incentive is typically a bonus paid in cash or stock or stock options.
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Expanded Definition
Some companies have been known to reward employees with new cars (such as Mary Kay Cosmetic's famous pink Cadilacs), special company paid vacations, or a variety of gifts.
Sales personnel are often rewarded with commissions on the products they sell, a direct incentive system. Old hands tell you that a straight commission system can be lucrative in the hands of an experienced salesman. (But most companies balk at paying salesmen more than their executives earn.)
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