In essence, the company withholds commissions for lack of performance and increases the compensation of those performing well. The company can afford to pay more than they could otherwise afford expanding the capacity of the plan to provide incentives for desired behavior. Breakage can be a win-win deal for both company and distributor. There are many ways to implement breakage and methods vary according to the type of plan used. For each new recruit, the participants in the bonus pool receive one share of the pool.
Breakage is only available when there is a gap between poor performance and desired performance.
If you need to set low levels of performance, than offer graduated compensation opportunities for those who are willing to work harder. Low performance requirements produce low performance. Redirect the breakage into new incentives when possible. To continue paying them based on performance that occurred months ago is wasting incentive dollars which could be applied to the better producers. It also reduces breakage opportunities.