Stop Guessing: Build an Incentive Strategy That Actually Works

Strategy, then incentive plan design. 

If you’re leading a business where growth and innovation come from within—driven by your people, not just your products—then you already know that incentives matter. But too often, incentive planning is reactive, inconsistent, or based on outdated templates that don’t reflect your company’s values, goals, or workforce. 

To be clear, when we say “incentives” we’re NOT talking about traditional sales commissions. Those are important, but they follow a different logic.  

So, what is incentive compensation? 

At its core, incentive planning is about more than bonuses or commissions. It’s about designing a system that motivates the right behaviors, supports long-term goals, and reinforces the culture you’re building. It’s the bridge between your business strategy and your people strategy. 

Clarity. Consistency. Alignment. 

These aren’t buzzwords—they’re the foundation of a successful incentive strategy. When incentives are clear, your team knows what success looks like. When they’re consistent, trust grows. And when they’re aligned with who you are as a company, they become a powerful tool for engagement and retention. 

What does strategic incentive planning look like? 

It starts with asking the right questions: 

• What outcomes matter most to your business right now? 

• What behaviors drive those outcomes? 

• How do your current incentives support—or undermine—those behaviors? 

• Are your incentives reinforcing short-term wins or long-term value creation? 

• Are the rewards you offer in exchange for strong performance a good fit for the types of employees in your company? 

You’ll still need to avoid pitfalls. 

Even with the best intentions, incentive plans can go off track. Here are some common missteps to watch for: 

Copying Your Competitors 

Just because a competitor offers a certain bonus structure or equity plan doesn’t mean it’s right for your business. Incentives should reflect your unique strategy, culture, and team—not someone else’s. 

Starting with a Pre-Built Plan 

It’s tempting to pick a popular incentive model and try to make it fit, or to use the incentive plan design that your advisors recommend most often. But this backwards approach often leads to misalignment. Instead, start with your goals and your team, and build a plan that supports them. 

Rewarding What’s Already Expected 

If you’re incentivizing employees for tasks they’re already paid to do, the plan loses its power. Incentives should recognize contributions that go above and beyond—actions that drive innovation, growth, or strategic outcomes. 

Overcomplicating the System 

A complex incentive plan might look impressive on paper, but if your team doesn’t understand it, it won’t work. Simplicity and transparency are key to building trust and driving results. 

Ignoring the Long-Term Impact 

Short-term rewards can boost performance temporarily, but they may also encourage gaming the system or burnout. A strong incentive strategy balances immediate wins with long-term value creation. 

We haven't forgotten comprehensive compensation… 

Incentives are just one part of the bigger picture. A comprehensive compensation strategy may include base pay, benefits, equity, and non-financial rewards.  

A strong incentive compensation strategy adds a critical layer to your overall Comp Stack strategy for team members who have an especially big impact on future company performance. 

Ready to stop guessing? 

If you’re tired of one-size-fits-all solutions and want a strategy that reflects your business, your values, and your people, it’s time to rethink how you approach incentives.