Talents play a key role in the development of SMEs. How to attract, utilize and retain talents for the long-term development of enterprises is the focus of modern enterprises. The imperfection and imperfection of the incentive system of modern small and medium-sized enterprises and the single incentive means have become the bottleneck restricting the sustainable development of enterprises, while the lack of corresponding incentive system or improper design of incentive system in the process of enterprise development has led to the stagnation of some enterprises. With the continuous improvement of China's market economy and the influx of foreign-funded enterprises after China's entry into WTO, the degree of talent competition will intensify. Foreign-funded enterprises and large state-owned enterprises will attract a large number of talents with reasonable and generous salaries and benefits. How small and medium-sized enterprises deal with this grim situation will become a new research topic. ?

The meaning of incentive mechanism is the willingness to achieve organizational goals through high-level efforts, on the condition of meeting certain needs of individuals. The word motivation itself contains the meaning of encouragement, promotion and encouragement. In the psychological sense, motivation refers to the psychological activity process in which people's needs and motives are stimulated by certain factors, and then behavioral motivation is generated. By stimulating some internal or external factors, it urges individuals to take positive actions to achieve some expected goals. The development of any enterprise faces two problems: 1) whether the enterprise is cohesive to employees and attractive to outsiders. 2) Whether the members of the enterprise are competent and can work actively, initiatively and creatively. How to keep the centripetal force inside the enterprise, constantly attract outstanding talents to the organization, how to make capable people work in the enterprise with peace of mind, strive to exert their potential and improve their work performance, all of which involve the incentive problem. It can be said that effective incentive mechanism and means are the key issues related to the survival and development of an enterprise. Every employee's work behavior, organizational behavior and interpersonal behavior are all dominated by certain needs and motives and driven by certain factors. In order to effectively use incentives, enterprises must carefully analyze the needs and motivations of employees, as well as the factors that can promote or motivate employees, and understand the internal mechanism of the incentive process, so as to formulate feasible incentive measures and achieve the maximum incentive effect.