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For example, a rise in the price of any good is an incentive for us to back off from buying it as much as we used to. Perhaps we'll buy a different good instead. So, for example, a rise in the price of butter creates an incentive to buy less butter.
Ing to the authors, incentives have three main components: economic, social, and moral.
Incentive compensation is a form of variable compensation in which a salesperson's (or other employee's) earnings are directly tied to the amount of product they sell, the success of their team, or the organization's success.
Examples of incentive pay include: Cash, including commission, year-end bonuses, sign-on bonuses, and performance bonuses. Shares or company stock options. A company car.
Incentives like restricted stock-based packages and cash bonuses ? awarded to employees after reaching certain long-term goals or staying on at the company for specified time frames ? are examples of long-term incentive compensation.