1. Level I Incentives: Level I incentives are geared towards increasing employee productivity, but usually for a short amount of time. I have personally never been given these kinds of incentives in my internships, but it is similar to being given extra credit on coursework if you do the extra problems. If I were working in sales, an incentive to sell a certain amount (i.e. 5% of the sale) would have motivated me to work harder to achieve a greater sale.
Level II Incentives: Level II incentives give employees motivation to find a better or smarter way of getting work done. At GE, engineers were encouraged to find a problem in the process of gas turbine manufacturing by awarding the best innovative idea/improvement with a cash award. The most beneficial aspect of this option for the company was the submission of several good improvements, but only the loss of one cash prize.
Level III Incentives: Level III incentives last the longest, because it pertains to an overall improvement in work culture. Whether it’s the encouragement of employee recognition, friendly competition, openness of management, any of these cultural aspects could foster greater productivity. At GE, it was generally understood that if you shared responsibilities/shadowed your manager consistently for a year or two, you would be entitled to the next level managerial position. Knowing there is always room to move up, as long as you achieve the best results, keeps employees working harder or better for a longer period of time.

2. Assuming each level of incentive increases in longevity, Level IV incentives would have to have the most lasting effect (beyond the few years Level III lasts). I think Level IV would have to not only be a combination of the past levels, but should also involve a rotational/long-term aspects to the prizes and the motives communicated from a higher level. For instance,