Find out what's important to your startup team
Light Fire inside them
Make sure your salaries are competitive
Be certain money is equally important to those you hope to motivate
Be certain you have a fair measure of performance
Don't use a performance measure that sacrifices the long term
Don't tie hands of your startup managers
Add feedback to merit pay
Don't put performance factors beyond employee's control
Don't forget team performance
Don't expect miracles to happen.