Final answer:
Pay for performance compensates employees with bonuses, commissions, or stock options upon achieving specific goals, aligning their interests with the company's success.
Step-by-step explanation:
The compensation structure that pays employees a lower base pay but rewards them with bonuses, commissions, or stock options if they reach pre-determined goals is known as Pay for performance. This approach aligns the interests of the employees with the financial performance of the company by providing additional compensation only when specific targets are achieved. In essence, it serves as an incentive for employees to contribute to the company's success, which can also lead to increased overall job satisfaction as employees feel directly rewarded for their efforts and contributions.