The term incentive pay has a positive connotation to it, but I view it as vague and open to interpretation. The interpretation that it allows is the interpretation of your work performance. Incentive pay is tied to an individuals performance. There are various ways that the performance is measured, it can be measured through profits or earnings, or it can be measured through reviews and evaluations.
What if the standards for incentive pay are not equal?
I have worked in environments where various managers will conduct performance reviews on their perspective employees. I have seen a rating process that is not clearly defined and therefore employees from different shifts are rated with different interpretations and therefor there are fluctuating scores among staff within same positions. Some average employees from one shift will receive similar scores to high achievers on another shift.
When the incentive is a pay increase and this is the standard for the pay increase, then where is the incentive?
I know that there are some companies out there that reward their employees with an incentive laden contract, and when it is practiced effectively I think it maximizes an employees potential. I think by creating a contract laden with incentives, it lays out a framework that motivates an employee to strive for excellence and it rewards the employees in their progression.