Fixed incentives paid monthly shall be treated as part of wages. Even if the same is based on results, like units produced or units sold, the same will be treated as 'piece rate wages'. In the cade of PF, any component of salary over and above Rs 15000 will be out of the scope of wages for contribution purpose and it is very rare that workers work on a salary which is less than Rs 15000. But in the cade of ESI, since incentives paid monthly is within the scope of wages it is difficult to avoid it unless you make an arrangement that the payment of incentive is made once in three months as a separate payment.
Now coming to a scenario that the incentive is paid once in three months, the grievance from the employees will be that their payslips will not show the amount as regular pay. This is often questioned when they approach a bank for financial assistance. The bank will naturally take only salary which the customer is getting every month and they will not consider any 'occasional receipts' of the customer. If this issue is taken up by the workers, it is advisable to make the incentive payable once in three months.