Most entrepreneurs consider the incentive schemes for the employees a burden on their P&L. At least, that is what they are being told by their accountants who want to get rid of these schemes at the first possible instant.

I believe incentive schemes are the best ways to align the organizational goals with the individual goals of the employees. Yes, I agree that some incentive schemes are not well designed and may have outlived their purpose since they first came into existence. Maybe no one has bothered to relook at them to make them relevant to the current scenario in the organization.

But aligning organizational goals to team and individual goals is the top priority of any management. And there is no better way of achieving this than well-designed and well-thought through incentive schemes. Incentive schemes flowing from the organizational goals and priorities will lead to superior and focused organizational performance. Employees will start to understand organizational priorities and goals more clearly and how they can contribute towards them.