Incentive Alignment

Incentive alignment occurs when the goals of individuals or groups are structured so that their interests support the overall objectives of an organization or system. When incentives are aligned, people are motivated to act in ways that benefit both themselves and the broader entity, reducing conflicts of interest. For example, a salesperson earning commissions based on sales encourages them to sell more, which benefits the company. Proper incentive alignment ensures everyone works toward common goals, improving efficiency and outcomes.