The main aim behind the current research paper is to examine the impact of incentive pay on performance and employee behavior in the workplace. To fulfill the main objective, in-depth research was conducted to develop the literature review besides the theoretical framework. Based on the conducted research, it was founded that the independent variable “incentive pay” impacts the dependent variable “performance” positively or negatively depending on the moderating factor which is “the employee behavior”. The employee behavior is divided into positive pointing to employees’ motivation and negative by highlighting the turnover intentions. All the research journals gathered under the current paper showed that well-planned incentive pay values and motivated employees to put their best and show a high level of performance.