Incentive plans are plentiful and are used by companies to help promote a more productive environment. Incentive plans are offered to encourage employees to do the best they can as well as exceed the goals set for them. Most employees are eager to reach and exceed their goals to reach the incentive set for them. However, the company does need to be mindful that some incentive plans can give the reverse effect they are going for and bring the moral down and the employee productivity too.

Some examples of incentive plans are profit sharing, casual rewards, and stock options. Incentive plans can be created based on the creativity of the creator. These few exampled are the more common incentive plans offered to employees.

Profit sharing is extended to employees when the company profits increase, and the money is available for bonuses. The larger the profits for the company the larger the bonuses are for the employees. One of the drawbacks to profit sharing is when the company is not doing well then the company is not able to offer profit sharing ("What Are The Different Types Of Incentive Plans?", 2011).

Casual rewards incentive plans are the rewards or acknowledgement for a job well done. These rewards could be something simple as a pat on the back, a sincere thank-you, or a gift card to dinner and a movie (“Incentive Pay (pay for performance),” 2006). This type of incentive is a way of letting an employee know that the company notice their efforts and appreciate them. People thrive on positive feedback. Casual incentives are characterized by the inexact or unexpected timing and amount of the reward. Disadvantages to this plan could be envy amount employees, views from employees of favoritism, and social distance between employees (“Incentive Pay (pay for performance),” 2006).

Stock option incentives convey the rights to the employee to buy