Rewards play a critical role in motivating employees and helping them feel genuinely valued for their contributions. Whether monetary (like bonuses and raises) or non-monetary (such as gift cards, extra time off, or public appreciation), thoughtful rewards can significantly boost engagement and loyalty. A SHRM survey found that 79% of employees said more recognition would make them more loyal to their employer. That shows how powerful appreciation can be when it’s done right.
But there’s a fine line between rewards that motivate and those that feel routine or excessive. Striking the right balance means understanding what to reward, when, and how.
Understanding what makes a reward ‘meaningful’
Not all rewards leave a lasting impression. Their true value comes when recognition is personal, fair, and tied to specific contributions.
Rewards backed by evidence: Every reward should be tied to clear, measurable contributions so employees know exactly what’s being appreciated. As Nirzari Sen, Founder & Chief Strategist at Pay2PerQ, shares, her organization ensures rewards are driven by purpose and backed by data:
“At Pay2PerQ, rewards are designed as outcomes of evidence, not gestures of goodwill. Each recognition moment is anchored in measurable business impact and skill evolution. Our Total Rewards Intelligence Suite™ converts raw performance data into recognition signals, ensuring every reward validates contribution, never routine appreciation.”
Making rewards personal: While data-driven rewards ensure fairness and credibility, the human touch makes it meaningful. As Akanksha Priyam, Total Rewards & People Analytics, Space42, points out:
“Reward strategies should reflect what the organization stands for, its values. But they resonate most when they feel personalised. Like offering a flexible workday after someone’s pulled off a tough project or giving a learning course to someone hungry for growth. The goal isn’t only to reward often but to reward with intention.”
Avoid over-recognition: When rewards are distributed too often or without strong reasoning, they can lose their spark. Instead of feeling appreciated, employees might start viewing them as formalities. Akanksha shares a valuable perspective:
“I’ve seen great performers quietly disengage when their efforts go unnoticed. A thoughtful gesture tied to real impact goes much further than multiple template-based awards. It’s about making people feel genuinely seen.” This balance of consistency and meaning ensures recognition feels fair, intentional, and truly motivating.
The strongest rewards are thoughtful, not routine. They show employees their work genuinely stands out.
Rewards can take different forms:
- Informal: Simple gestures like saying “thank you,” giving praise such as “great job,” or assigning someone to a special project.
- Formal: More structured incentives like prizes, commissions, bonuses, gift cards, or stock options.
A meaningful reward has four key elements:
Personal touch & flexibility: People are motivated by different things. Some value bonuses or salary hikes, while others prefer time off, learning opportunities, or wellness perks. The key is understanding what matters to each person and tailoring rewards accordingly. When employees see that their preferences are considered, they feel truly seen and valued.
For example: allowing an employee to choose between attending a skill-building workshop, taking an extra day off, or receiving a wellness perk makes the reward personal and meaningful, showing that the organization truly values their growth and well-being.
Purpose and effort matter: Rewards work best when tied to specific achievements. Linking recognition to clear performance goals and business outcomes ensures employees know exactly why they’re being rewarded.
For example: Wipro’s Winners’ Circle program rewards employees through four main pillars:
- Unit Awards: Recognizes major contributions to business goals, shared in forums like Town Halls.
- SPOT Awards (Monetary & Non-Monetary): Rewards behaviors that reflect Wipro’s values, with both cash and non-cash options.
- Long Service Awards (LSA): Celebrates milestone years of service with personalized yearbooks, gift points, and social announcements.
Timing is everything: The power of a reward often lies in when it’s given. Timely recognition strengthens motivation and reinforces positive behavior, while delayed rewards can lose their meaning. Acknowledging good work right when it happens keeps the momentum and morale high. Using software to track KPIs, like productivity or customer satisfaction, helps reward employees promptly.
Transparency builds trust: Employees should clearly understand how the rewards program works and what drives recognition. When processes are transparent, people feel confident that rewards are fair and unbiased. Openness not only prevents feelings of favoritism but also builds trust between the organization and its employees.
For example: instead of vague phrases like “showing initiative,” set clear phrases such as “completing a project two weeks ahead of schedule” so employees know exactly what is expected to earn recognition.
Finding the right balance between frequency and impact
While regular rewards help keep morale high, too much recognition, especially when not tied to meaningful achievements, can reduce its impact. On the other hand, too little recognition can leave employees feeling undervalued. The key lies in striking a balance between frequency and genuine significance. This balanced approach ensures recognition feels fair, intentional, and truly motivating.
The bigger message
Rewards are more than just money, they recognize effort, intention, and impact while giving meaning to work. When done right, they send a clear message to employees: “Your efforts are noticed and valued.”
A well-designed rewards and recognition system is an investment in people and the organization. It can:
- Increase productivity by motivating employees to perform at their best
- Boost retention by making employees feel valued
- Strengthen culture by consistently celebrating achievements, which builds trust, teamwork, and loyalty
In conclusion, getting rewards and recognition right is one of the smartest moves a company can make, benefiting both people and business outcomes.
