Playbook 3 — Incentive Systems That Scale

Alignment through clarity and design.

Purpose

One of the fastest ways to weaken performance in a growing company is through unclear incentives.

When systems are inconsistent, contributors lose focus, managers lose time clarifying, and leadership loses leverage.

Incentives have one job: create clarity that scales.

Keep It Simple

Compensation frameworks should be stable and predictable.

People know their range, understand progression, and can plan accordingly.

Growth = Scope + Impact

Raises reflect expanded responsibility.

Promotions follow proven impact at the next level.

The path is visible and consistent.

Bonuses Must Be Contextual

Objective bonuses (e.g. tied to measurable outcomes) reinforce alignment.

Subjective bonuses create noise if not anchored in clear criteria.

Default: bonuses are either systemic (profit-sharing) or symbolic (rare recognition).

Equity Must Be Explicit

Equity terms, vesting, and exit conditions are written and verifiable.

Ambiguity in ownership introduces operational risk.

Salary Predictability

Teams with clear, predictable ranges retain focus and reduce negotiation overhead.

Lesson: predictability compounds execution speed.

Growth Path Visibility

Transparent progression frameworks correlate with higher retention and smoother internal mobility.

Lesson: visibility converts uncertainty into focus.

Equity Clarity

Companies that document vesting and leaver terms maintain credibility through growth cycles.

Lesson: clear ownership terms prevent future noise.

In a healthy system:

Salary structures are predictable and visible.
Raises and promotions follow scope and impact.
Bonuses are contextual and measurable.
Equity terms are explicit and contractual.
Executive role → design incentive systems that scale: simple, predictable, and self-reinforcing.

Clarity preserves focus.

Predictable systems protect decision energy.

When incentives are well-designed, teams stay aligned on delivery, not interpretation.