Editing Incentive (section)

==== Conflicts generated by pay variance ====
Incentives can have a bipolar effect on the company.
On the one hand, the company's incentives to employees may create a pay gap. For example, low-paid employees may reduce their production or contribution to the company. Low-paid employees and high-paid employees may not be able to communicate and cooperate effectively, causing low-paid employees to gradually lose their enthusiasm for work.<ref>{{cite journal |last1=Breza |first1=Emily |last2=Kaur |first2=Supreet |last3=Shamdasani |first3=Yogita |title=The Morale Effects of Pay Inequality* |journal=The Quarterly Journal of Economics |date=10 October 2017 |volume=133 |issue=2 |pages=611–663 |doi=10.1093/qje/qjx041|doi-access=free }}</ref> Firms should provide a fair amount of incentives for both low-paid and other employees, incentives for low-paid workers can be breaks rather than monetary incentives. Motivating employees with financial rewards may make a difference. That's because if the company is profitable in the first year, it may have plenty of bonuses to hand out to employees. However, if the company makes less money in the second year than it did in the first year, the company may not be able to give employees the same bonuses as in the first year even though they put in the same effort. This also reduces employees' motivation to work. Therefore, incentives may be counterproductive. Firm can provide other types of incentives rather than monetary incentives, such as promotion or vacation breaks for high-performing employees.