Improving the productivity and profitability of a company is a continuous challenge faced by industries. This capability creates sustainable competitive advantage. The paper presents an incentive scheme that has been designed and successfully implemented to reward work and performance as motivation for productivity improvement among the operative staff of a Malaysian manufacturing company. The paper highlights and discusses the design criteria of the scheme, process of implementation, key success factors, benefits and areas for improvement. © EuroJournals Publishing, Inc. 2012.