Design Elements and Requirements of Incentive Systems in Organizations

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Incentive systems are defined as mechanisms designed to motivate employees by positively influencing their performance, ultimately benefiting organizational goals. Drawing on various perspectives, the paper highlights how these systems encompass all working conditions that affect motivation and behavior. They not only encourage desired actions but also aim to prevent unwanted behaviors through rules and potential penalties, such as reduced income for low performance. This dual function emphasizes the importance of structured incentives in shaping employee conduct and organizational success.