Rewards or penalties designed to induce one set of people to act in such as way as to produce results that another set of people want. As rewards for good results, incentives can include higher pay, better working conditions, better job security, better promotion prospects, or simply prestige. As penalties for poor results, incentives may take the form of lower pay, worse working conditions, poorer promotion prospects, demotion or sacking, or simply loss of reputation. Incentives may be applied in response to actual results, such as output or profits, or to management's perceptions of inputs, such as attendance and disciplinary record. Incentives cannot be based on inputs or outputs which cannot be observed by management: to motivate these it is necessary to rely on self-respect or team spirit.

See also:

export incentives, and investment incentives

• creditors
• credit rating
• credit-rating agency
• credit rationing
• credit restriction
• credit risk, counter-party
• credit squeeze
• credit standing
• creditworthiness
• creeping inflation
• crisis
• criteria, convergence
• criterion, welfare
• critical path analysis
• cross-elasticity of demand
• cross-holding
• cross-holding of shares
• cross-partial derivative
• cross-price elasticity
• cross-section data
• cross-subsidization
• crowding out
• CSO
• CTT
• culture, dependency