The same incentives that are meant to motivate the high performers may sometimes cause them a great deal of pain when not paid due to some technicalities.

And this is way more common than you think.

Throughout my career, I have seen plenty of such cases, a few of which I will discuss below.

Case 1: An ex-colleague named Mohan was working with a large company, managing a portfolio of 20 clients. The incentives would be paid on total profits only if the profits exceeded 15%. After a few months, a colleague quit, and her portfolio of 20 clients was merged with Mohan’s portfolio till a new person was hired.

Considering that this was a temporary arrangement, targets were not redefined. The company could not hire a second person. Mohan managed to make a 17% profit on his portfolio.

However, Mohan’s performance was assessed based on the profits from 40 clients. The other portfolio of 20 clients suffered a loss of 5%, as managing 40 clients for a single person was not possible. The average profit of the combined portfolio was 6%, way below the cut-off of 15%.

Hence, he was denied an incentive.

Mohan, instead of holding grudges, found a new job and moved on.

Case 2: Another ex-colleague of mine, Sailesh, was working for a large company that refused to pay him incentives. He sued the employer and quit the job.

The fact that he filed a case against the company was publicly known.

No other company was ready to hire him.

Case 3: Sometimes, employees themselves redefine their goals based on certain constraints that they believe will make it tough for them to achieve those goals. Arya’s manager discussed it with her and finalized a target of 5 crores. No incentives will be paid up to 3 crores.

A few months later, she argued with the manager that given the conditions of the market and other factors, the most she could achieve was a sale of 2.5 crore.

The manager tried explaining that if she modified her target segment and worked a little harder, she would be able to achieve sales of 5 crores.

However, she was adamant that she would only achieve a sale of 2.5 crores. Realizing that the discussion would not lead to a logical conclusion, the manager left the discussion for a later time while Arya assumed that he had agreed.

She delivered sales worth 2.5 crore and was later denied incentives.

How to avoid situations like these:

1.) Maintain a good relationship with your manager to ensure that your opinions are heard and valued. A happy manager will always make sure that you receive your share of incentives.
2.) Improve visibility to the leaders and manage perceptions in such a way that they help to ensure that the system is fair towards you. It also helps if you have a good godfather in the industry.
3.) Document all the necessary information after a discussion as an employee or as a manager. Ensure that the formula for calculating incentives and criteria for deciding whether the targets have been met or not are clearly communicated.

Although unpaid incentives and lack of recognition can feel like a personal setback, employees should remember that we can’t control the system around us; we can only control our response and preparation for the future. Learning from these experiences, one may build transparency and safeguard one’s professional interests. Then, we can turn challenges into stepping stones for growth.

Have you or someone you know faced a situation where promised incentives were not paid? How did you handle it, and what would you tell others in the same situation?

Share your journeys in the comments below!

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Until next time, keep learning and strive for a better career tomorrow!