[DaiPlusPlus]

Some companies have optional on-call and attach danger-money to it, so that’s an example of comp being used to motivate, not retain.

Surely it’s motivation if the comp is offered in exchange for the completion of some defined future work or attaining a goal? E.g. “I’ll grant you a $20k bonus if you get this project done by Monday”-kinda thing… though arguably this specific case is an example of bad management…

[kqr]

In the on call case, it's still about retention. They need to provide extra money for extra work, otherwise people will just go somewhere else where they get more money for more work.

Your specific example is indeed bad management, as you say. As is almost every other example of the same shape. "You will get X if you do Y" works when X is very generous, which is an expensive way to incentivise Y.

Another problem is that you have to be very consistent and always offer X for Y in the future, or people's motivation for Y will drop to lower than it was before you offered X for it.

There's been plenty of research on this so there's no need to guess. A good start is Pink's book Drive.