<![CDATA[This study critically reassesses the effectiveness of performance-based incentive systems in enhancing employee productivity and engagement. Through a qualitative descriptive literature review, the paper explores both the intended benefits and unintended consequences of incentive schemes in organizational contexts. Findings reveal that when designed with clarity, fairness, and strategic alignment, performance-based incentives can improve motivation, strengthen work discipline, and support talent retention. However, challenges such as stress, output manipulation, and short-termism may arise, particularly in poorly governed or culturally mismatched environments. The role of internal control, corporate governance, and non-financial performance indicators is highlighted as essential to shaping employee behavior and preventing incentive-related burnout. This review contributes to existing literature by integrating motivational theories with practical considerations, emphasizing the contextual dynamics of incentive effectiveness. Recommendations are offered for future research to examine longitudinal impacts, cultural moderating factors, and digital performance infrastructures in incentive governance]]>
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