Incentive Structures

Incentive structures refer to the systems designed to motivate individuals or groups to perform specific actions or behaviors. They can involve rewards, such as money, recognition, or benefits, that encourage desired outcomes, like increased productivity or learning. Conversely, they may also include penalties for undesired behavior. By aligning incentives with goals—such as improving performance in work or education—these structures guide decisions and behavior. Understanding incentive structures helps individuals and organizations create environments where everyone is motivated to succeed.