Definition of Short-Term Incentive:
Short-term incentives are rewards given for outstanding performance within a specific period, such
as bonuses, commissions, or other financial rewards.
Why Short-Term Incentive is Correct:
It directly acknowledges and rewards top performance, motivating employees to maintain high
standards.
Eliminating Incorrect Options:
A . Long service incentive: Recognizes tenure, not performance.
C . Guaranteed annual bonus: Is not tied to performance but often contractual.
D. Pension contributions: Are long-term benefits unrelated to performance recognition.
International HR Reference:
SHRM Compensation Guidelines: Discusses short-term incentives for rewarding exceptional
performance.
