Lucrative Incentive plans or handsome fixed salary

What is one man’s poison is another man’s medicine. Similarly, just as a handsome salary has its advantages and disadvantages, a lucrative incentive plan has its pros and cons.

The Handsome salary

  • Advantages
  1. Assured income
  2. Lesser pressure to achieve targets
  3. Freedom to plan ahead for investment and saving
  • Disadvantages
  1. Fewer opportunities to increase earnings
  2. Stagnation due to lack of competitive environment
  3. Inability to stretch income further than a certain amount

The Lucrative Incentive plan

  • Advantages
  1. Increased opportunities for earning
  2. Personal growth and growth in the company as well due to performance
  3. Freedom to schedule work according to best productivity phases.


  1. Higher pressure to perform.
  2. No assurance of income
  3. Inability to schedule regular investments or savings.

Now that we have reviewed the pros and cons of both choices it becomes painfully obvious that neither option can be beneficial singularly. Practicality begs that the best of both options be clubbed together to provide an employee with the perfect mix of a fixed income alongside increased opportunities to earn more. Besides, it also creates a healthy environment for competitive growth without inducing a meaningless number game where desperation could force an employee to adopt unethical practices.

It also can be noted that whereas a handsome salary is viewed as a more traditional and staid approach towards earning a livelihood, the young employees of today prefer high and lucrative schemes since it enables them to follow a get-rich-quick lifestyle that is the norm today. They do not have the time or inclination to invest or save in a piece meal fashion. They prefer to invest a large amount in one go and then reap the dividends.

This, although risky, can also be quite beneficial. In the long run however a fixed income has very few real disadvantages. And to add to that, it’s after all growth that any competent individual is after and the true sense of growth comes from the overall increase in living standards which is again reflective of increased earnings thus necessitating the role of lucrative incentives.

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