LO 13-1 Discuss the connection between incentive pay and employee performance.∙ Incentive pay is pay tied to individual performance, profits, or other measures of success.∙ Organizations select forms of incentive pay to energize, direct, or control employees’ behavior.∙ It is influential because the amount paid is linked to predefined behaviors or outcomes. To be effective, incentive pay should encourage the kinds of behavior that are most needed, and employees must believe they have the ability to meet the performance standards. Employees must value the rewards, have the resources they need to meet the standards, and believe the pay plan is fair.