An Incentive is a reward that should influence behavior and performance. In the context of commission and bonus, it is often called performance salary. It covers both financial rewards such as money, bonus or commission and non-financial rewards such as recognition, benefits or extra responsibilities.
In a sales organization, incentive is one of the most effective tools for creating motivation. When a salesperson can clearly see how a particular effort triggers a concrete reward, a direct link arises between performance and pay. That makes incentives a powerful driver of behavior.
Financial incentives, such as commissions, accelerators or bonuses, have the advantage that they are easy to understand and can be accurately measured. Non-financial incentives, on the other hand, can strengthen culture and cooperation because they appeal to motivational factors other than money alone. Often the most effective model is a combination of both.
For companies, it's about designing incentives that are both fair, transparent and scalable. If the rules are unclear or if the reward is not perceived as fair, the incentive quickly loses its effect. Therefore, transparency and automation are important elements in modern solutions where performance pay is managed digitally.
In short, an incentive is not just a bonus or an extra good. This is the very foundation of performance pay: a reward that makes it worthwhile to put in extra effort — and that ensures that the company's goals and employee motivation go hand in hand.