Shareholders, Managers, and Employees

Most business owners of large organizations are shareholders who hold leadership positions at other companies and who typically do not come into the office on a regular basis. Accordingly, to offer those individuals incentives, managers give them substantial bonuses (called incentive plans) based on the company's financial success.

If the company succeeds, the head of the company collects a substantial bonus. If the company does not succeed, the head will not receive a bonus and runs the risk of termination. Incentives also exist within other levels of companies. Commissions are offered for sales departments based on the income they generate for the company. If individuals work hard, they can receive a great deal of pay. If they do not work hard, they receive a smaller bonus, if any.