Performance pay is a compensation system where employees receive additional financial rewards based on their work performance. This approach aims to motivate employees to achieve specific goals or improve their productivity. It can take various forms, such as bonuses, commissions, or merit-based salary increases. Employers often implement performance pay to align employee efforts with the organization's objectives. By linking pay to performance, companies hope to enhance overall productivity and job satisfaction. This system is commonly used in industries like sales, where individual performance can be easily measured against targets or benchmarks.