An important aspect of creating and implementing an incentive compensation plan for your company is measuring an employee’s performance against an established goal. There needs to be a concrete way to decide whether an employee met the criteria needed to earn their incentive. The goals should be clearly established and transparent to employees so that they know what to work toward.

Incentive compensation programs originated from the idea that rewards motivate and drive behavior, proactively productive behavior. Most commonly known and applied to the corporate setting, incentive compensation programs are capable of catering to a spectrum of industries as well as different levels of employment. It’s a universally accepted and expected part of the employment system, it can even be used as a recruitment tool. If you’re wondering which incentive is best for you, here are the most popular incentive compensation programs ranked and explained.