Performance-based pay is a compensation system where employees receive financial rewards based on their job performance. This approach aims to motivate workers to achieve specific goals or targets, aligning their efforts with the organization's objectives. It can take various forms, such as bonuses, commissions, or salary increases, depending on the individual's contributions. This pay structure is often used in industries like sales, where employees' earnings can directly correlate with their sales figures. By linking pay to performance, companies hope to enhance productivity and encourage a culture of excellence among their workforce, ultimately benefiting both employees and the organization.