Which term describes a program that offers incentives for employees to improve performance and increase productivity?

• A. A program that offers incentives for employees to improve performance and increase productivity
• B. A system of mandatory salary reductions
• C. A plan for promoting internal candidates only
• D. A bonus for perfect attendance

Answer: (B)

Incentive programs are designed to motivate employees by tying rewards to performance and productivity targets. The idea is to encourage higher effort and better results by offering something of value when goals are met, such as cash bonuses, recognition, or other perks. This approach differs from punitive measures or purely advancement plans, which aren’t focused on rewarding performance improvements. A system of mandatory salary reductions would punish employees rather than incentivize them, so it isn’t the right concept. A plan for promoting internal candidates focuses on advancement rather than on rewarding performance improvements. A bonus for perfect attendance is a type of reward, but it represents a single incentive rather than the broader, structured program aimed at improving performance and productivity overall.