Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

An incentive-pay program is designed to motivate employees by tying a portion of their compensation to their performance and contributions to the organization. Bonuses are a prime example of incentive pay, as they are typically awarded based on achieving specific goals, exceeding performance standards, or contributing to the company's success in a measurable way. This aligns employees' financial incentives with the objectives of the business, encouraging higher productivity and engagement.

The other options, while important components of an overall compensation package, do not directly serve as incentives tied to performance. Health insurance, retirement contributions, and vacation days provide valuable benefits to employees but do not typically fluctuate based on individual or team performance metrics. Thus, bonuses stand out as a clear component of an incentive-pay program, specifically designed to reward and encourage exceptional employee performance.