Incentive pay is a type of compensation designed to motivate employees to achieve specific performance goals. This additional pay can come in various forms, such as bonuses, commissions, or profit-sharing. It encourages workers to enhance productivity and align their efforts with the company's objectives. Employers often use incentive pay to reward exceptional performance or to drive sales. For example, a salesperson might earn a commission for each sale made, while a team that meets its targets could receive a bonus. This system aims to boost morale and improve overall business results.