Incentive plans should be used when there is a clear relationship between employee effort and quantity or quality of output, when the job is standardized, the work flow is regular, and delays are few or consistent, and when quality is less implortant than quantity, or, if quality is important, it too is easily measured and controlled. Incentive plans may in some cases not be the right thing to have for many reasons. You get what you pay for. Pay is not a motivator. Rewards rupture relationships.
Rewards can unduly restrict performance.
Rewards may undermine responsiveness. Rewards undermine intrinsic motivation. People work for more than money. Every company has compensation plans. These plans may vary from company to company.