Typically, if you reward something, you get more of it. You punish something, you get less of it. And our businesses have been built for the last 150 years very much on that kind of motivational scheme. – Daniel H. Pink


A job well done calls for a reward. On one hand, the reason for this is because the employee deserves it. More importantly however, there are psychological underpinnings behind giving Rewards: when reinforced, such good behavior would tend to be repeated in the future. Thus, a proper reward system in place would lead to consistently good performance from your employees.

There are a numerous ways of rewarding employees. It doesn’t always have to involve money, which is probably the most uncreative way of getting it done. Entrepeneur.com got it right when it cited the four areas of what makes for a strategic reward system: Compensation, Benefits, Recognition and Appreciation. (So you won’t forget, remember the acronym: CRAB)

Each of the four areas has its own pros and cons, but finding out what best works for the office would lead to the most favourable results. Let’s take a look at the different ways of how to reward employees.


As the old saying goes, “Money makes the world go round.” Thus it’s not really surprising to learn that giving money to reward good performance will always be a gesture welcomed by the employee.

An advantage to this is that it is a no-brainer reward. The employer or the HR do not even need to think creatively or prepare an elaborate plan of getting it about; the compensation merely needs to be handed to him and that’s it.

However, the disadvantage here is if the employees become dependent on such bonuses as a requisite for them to do their job. It becomes a “What’s in it for me” mentality. To avoid this mindset, the compensation reward must clearly be for major milestones and accounts only, and given to those deserving employees and never to freeloaders.

Reward ideas for Compensation:

  • Spot Cash Bonus for major accounts
  • Mission/ Task Bonus
  • Referral Bonus


Other than money, giving benefits as a reward is a good reward strategy for the employer. Benefits are usually those advantages given in order to make the employees’ lives easier in general. For instance, the value of extra vacation leaves is pretty self-explanatory. Another example would be to grant the employee a flexi-time schedule instead of sticking routinely to the 8 to 5.

These benefits will certainly serve as a good incentive for the performers, and met with envy by the other employees End result? Everyone is driven to excel better in the workplace. In fact, these benefits might even prove to be more valuable than compensation when the employees realize the importance of such rewards at stake. After all, these policies cannot be bought with money and are granted by the employer after careful thought and consideration.

The disadvantage however is that the employer really has to think these benefits through. The employer must be able to fulfill the benefits which it has promised; otherwise, it would result to disgruntled employees. Only stick to reasonable rewards that you can commit to. Better yet, impose a time frame on certain benefits that you don’t intend to make permanent, so that the employee knows his boundaries.

Reward ideas for Benefits:

  • Free Parking Space for a Month
  • Flexi-time Schedule
  • Vacation Leaves


Webster’s definition for Recognition: “it is the act of accepting that something is true or important or that it exists.”

Ever wonder why big chains and franchises give out Employee of the Month awards? It’s because company practices have universally realized the value of Recognition as an aspect of the reward system. Recognizing your stellar employees validates their efforts in the workplace. It boosts their morale and encourages them to keep up the good work.

The advantages of giving Recognition Awards is that it is a relatively straightforward process. An employee gets recognized for good work or performance, and usually a plaque or a framed token is given to him. It can also be accompanied by bonuses or gifts.

The cons of Recognition is that it is not everyone’s cup of tea (especially the introverted ones.) Also, in the interest of fair play and justice, the rubrics for judging must apply equally to employees grouped in a similar category. Thus, it requires deliberation on the part of the employer or HR.

Reward ideas for Recognition:

  • Employee of the Month
  • Surprise Company-wide Awards Ceremony
  • Pizza Party


Appreciation is recognition on a more personal level. This is usually done by the employer personally speaking and validating the employee for his stellar performance. More creative ideas include having a dinner with the bosses (paid for by the employer of course); having a day-off to visit the company headquarters personally and be toured around; or being given gift certificates, vouchers or other trinkets.

The pros of Appreciation as reward is that it is relatively inexpensive. Another advantage is that there are virtually unlimited options of showing appreciation. Thus, this is where the company’s HR team may be put to good use.

The cons of Appreciation is that it requires a bit of creativity on the part of the employer. Also, the line between appreciation and favouritism must be distinguished. For instance, appreciation would work well for big companies where the CEO would pull out those stellar performers, and spend quality time with them in appreciation of their valuable contribution to the company. On the other hand, smaller, more intimate companies should exercise prudence, lest acts of appreciation be mistaken for favouritism by the other employees.

Reward ideas for Appreciation:

  • Gift Certificates
  • Dinner or Lunch Out with the Bosses
  • Letter or Package from the CEO


For more ideas, check out American Express’ article 101 Ways to Reward Employees (Without Giving Them Cash)



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