For an organisation to succeed, the business owner must attract and retain productive employees. Therefore, a business establishes competitive incentive plans to accomplish these objectives.
Incentive plans, which are known as performance incentive plans (PIPs), motivate employees to exceed expectations and grow the business. Such plans promote exceptional behavior during a specific period. In addition, they attract potential employees to an organisation and encourage company loyalty.
However, an incentive plan must contain obtainable goals. Otherwise, employee morale will fade, and the plan becomes ineffective.