An incentive agreement is the kind of agreement that specifies an additional reward, whether in monetary value or any other perks and benefits. Unlike an owner’s agreement and a partnership agreement that are used for business to business transactions, an incentive agreement is commonly used by the human resource department to promote efficiency and effectiveness in the workplace.
Employees are commonly subjected to an incentive agreement if their work processes allow them to execute additional risks, work functions, or achieving something that is over a benchmark goal like sales quota or any other productivity measures. We have put together a number of incentive agreement templates and samples so you can have an idea on how to create this document.
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What is an Incentive Agreement?
Incentive agreements are used to ensure that employees have something to look forward to if they will exceed the minimum requirements of their job functions. An agreement template used in discussing information about incentives can be defined as follows:
- An incentive agreement is a list of regulations that specifies the ways on how an employee can get an incentive.
- Incentive agreements are agreement templates which discuss the scopes and limitations of the incentive being offered by a company to its workforce.
- Just like a referral agreement signed by an employee if he/she plans to refer someone to the company, an incentive agreement is also used to provide programs to the employees of a business. This is done so that the professional relationship of the company and its workforce can be as beneficial to both ends as possible.
- Incentive agreements directly state the additional works that are needed to be done and the equivalent value that an employee can get should the specified work functions be achieved.
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Guidelines and Tips in Creating an Incentive Agreement
If you want to create an effective incentive agreement where all the parties involved will benefit, here are some guidelines and tips that you may follow:
- Remember to include a detailed discussion of the kind of incentive that an employee will get.
- It will be best if you set the rules accordingly on how employees can get an incentive so that they know what to expect depending on their effectiveness.
- You can use any of the printable agreement templates available on this post so you can have a guide on how to make a comprehensive incentive agreement.
- Just like a human resources confidentiality agreement, the incentive agreement has to only be between a particular employee or a specific company department head. Incentives vary depending on the regulations followed by the business. Keeping incentive discussions just between the parties involved will allow less to no comparisons of incentive programs of varying company divisions and/or positions.
- Make your statements concise. This will also make sure that no misunderstanding takes place. This will also allow you to easily avoid any potential dispute.
Make your incentive agreement highly-usable, detailed, and as well as well-organized as it can help the business encourage employee loyalty and retention. We hope that the guidelines that we have provided can help you do just that.