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incentive

in-SEN-tiv /ɪnˈsentɪv/

nounB2GREGMATSAT

ProfessionalNeutral

A thing that motivates or encourages someone to do something; a payment or concession to stimulate greater output.

An incentive is a 'carrot' dangled in front of you to make you work harder. It is announced before the work begins to drive performance.

The story behind the word. In Latin, 'incentivus' described the person who set the tune or the pitch for a song. Just as a lead singer's voice 'incites' the rest of the choir to follow, a modern incentive 'incites' or sets the pace for employees to reach a goal.

Word relationships

inducement: Inducement is more formal and can sometimes imply a bribe or a trick; incentive is purely professional.
motivation: Motivation is the internal feeling; an incentive is the external reward that creates it.

deterrent: A deterrent is something that discourages action, the opposite of an incentive.

Commonly confused with

bonus: Incentive is the promise; bonus is the payout.

Word family

incentivize (verb): To provide an incentive for.

Collocations

financial incentive
tax incentive
strong incentive
incentive scheme

Example sentences

"The incentive to work is the hope of reward." An economic principle.
"The government offered a tax incentive for homeowners who installed solar panels." A government policy to help the environment.

Memory hook

IN-CENT-IVE: It gives you more CENTS (money) to be more actIVE. Setting the tune for success.

When not to use

Don't use 'incentive' for a reward that was a total surprise (that's a 'bonus').

Fun facts

The 'cobra effect' is a famous example of a 'perverse incentive' where a reward for killing cobras led people to breed them for money.
Incentives don't have to be money; they can be extra vacation days or public recognition.