Pub. date: 2007 | Online Pub. Date: September 15, 2007 | DOI: 10.4135/9781412952651 | Print ISBN: 9781412924702 | Online ISBN: 9781412952651| Publisher:SAGE Publications, Inc.About this encyclopedia
In the field of human resources and compensation, incentives are specific rewards that are offered contingent on the achievement of some predetermined level of performance, or the performance of some specific type of behavior viewed as desirable by the organization. It could be argued that the earliest systems of exchange between organizations and individuals were primarily incentive based (i.e., piece rate systems in which individuals were paid a fixed rate for producing a set number of units). However, with the introduction of scientific management around the beginning of the 1900s, organizations moved to paying a fixed base wage or fixed annual salary. For most jobs, with the exception of sales and some lower-level jobs, monetary incentives played a secondary role as a type of additional method of motivating desired performance beyond that offered by performance appraisal and merit raises. For organizations today, incentives serve as a way of attempting to ...