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Importance of Reward and Recognition Programme incorporate

Employee good work attracts not only job appreciation but something more than that. This something in corporate can be named as Reward. As per the latest trend employer appreciate good work done by employees in a special way. The ways of sharing their appreciation however differ. In order to have a systematic approach towards the appreciation of rewards, there is a need for reward and recognition policy.

Reward and Recognition Policy

Employees besides wanting a good salary, friendly environment, growth opportunity also want to be appreciated for the outstanding work performed by them. Reward and recognition play a major role in attracting and retaining talent within the organization. It not only acts as a morale booster but also promotes 3 P's i.e. Productivity, positivity, and promotion. Such kind of programme builds up motivation in the workplace. However, an effective reward and recognition programme cannot work in isolation. It needs to have collaboration from employee managers and senior management. The role each one of them plays in making reward and recognition a success is explained below.

        Senior Management       Managers         Employees
  • Ensures implementation of policy.

  • Ensure efficiency in rewarding outstanding work.

  • Transparency.



  • Transparency in all process related to Reward and recognition.

  • Recognition of outstanding work.

  • Creation of positive recognition program.



  • Working for best productivity outcome.

  • To foster channel of open communication.

  • Generate positivity towards recognition programmer.


Recognition can be given by a large number of ways. Praising is inexpensive. A good reward and recognition programme should be.


Significant:  Rewards must be based on values, goals, and priority.

Flexible:  Reward programme must be flexible. It must be as per the demand of time and place.

Personal touch:  Whatever is the kind of reward formal or informal, it is necessary to have a personal touch.

Timely: An employee should be rewarded on time else credibility is eroded with the passage of time.

Genuine:  The appreciation must be genuine.

Disclaimer: The content prepared has been created with the greatest care. These policies have been prepared for the sample. However, for accuracy and completeness, cannot guarantee. The user is therefore requested to professionally check or to have professionally checked the suitability of all content for its use.

Sample Policy For Reward and Recognition at Workplace

A quick Guide, Templates for Example



  1. Aim

  2. Purpose

  3. Scope

  4. Definitions

  5. Component of reward structure

  6. Steps for development of effective reward structure

  7. Why reward employees

  8. Parameters for reward programme

  9. Most important steps for reward and recognition

  10. key

  11. Reward and incentive

  12. Nominations

  13. Selection

  14. Effectiveness of policy

  15. Review of policy.




Aim: The major aim of reward and recognition policy is to attract and retain the best talent. In order to attract and retain it becomes important to recognize the efforts put in by the employee in terms of performance, attitude, and achievements.

Purpose: The purpose of the rewarding performance is to build up an organizational culture where good work done by employees is valued and their tremendous efforts are recognized.

Scope:  This policy is applicable to all the regular employees of the company.


Reward: Cash or noncash award given for outstanding performance by the employee. 

Reward and recognition: Reward programme developed and communicated by the HR department.

An Important component of a reward programme



To exhibit the values of the organization in their day to day work.

Meetings targets assigned to them.

Proper and fair treatment for all team members.

Efficiently recognizing team and individual employee efforts.

Monitoring employees performance

HR  Department



To ensure the policy is followed in a fair and equitable manner

Monitoring of effectiveness and cost of the policy

Communication of policy

Coordination for nominees assessment

Supporting values and embedding them in everyday’s life.



Senior  Management


Effective implementation of policy

Rewards and incentives:

Rewards and incentives are beneficial both for the employee as well as the employer. When employees are recognized for their best performance and productivity employees have increased morale, job satisfaction and increased involvement in the organization. With the help of workplace rewards and incentives, both employer and employee enjoy a productive and positive work environment


What does incentive mean?

a) Incentive means something which encourages a person to do something.

b) the Incentive is a performance linked reward to improve motivation and productivity of the employee.

c) Incentive includes the extra pay for exceptionally good rewarding work in addition to regular wages of the job.

Types of Incentive:

The types of incentive include the monetary incentive and Non- monetary incentive.

Monetary Incentive:  Monetary incentive means a kind of incentive that pays for good performance of employee through Money. Monetary incentive includes Merit Pay, profit sharing plan, Pay and allowance, commission, stock option, bonus, suggestion plan and perks, fringe benefits and perquisites. 

Non-Monetary IncentiveNon-monetary incentive is given to an employee for best performance through perks and opportunities. These are valuable to the employee as they result in the increased morale of the employee as they get to learn new skills and can pursue the advance opportunity. It is not necessary that only money is the motivator, when the Non-monetary incentive is rewarded to the employee it results in satisfaction of self-actualization and self-esteem needs.

Rewarding work is always a strong motivator. 

Non-monetary incentives include 2 types of rewards


Formal and Informal rewards

Formal rewards: Formal rewards are being used for rewarding employee performance within set defined guidelines. There are various ways to recognize employees work in formal ways. For example  Career advancement, job enrichment, employees participation, diamond star, Year of service award, peer to peer recognition, Celebration chart, Formal letter of appreciation, team trophy, one dedicated corner in company's newsletter etc. Formal rewards are an alternative to the spontaneous rewards which are given on an immediate basis, formal rewards are more planned as compared to non-formal rewards.

In Formal Rewards:This is the most effective means of rewarding and recognizing the efforts of employees on an immediate basis. It is generally given in the form of  Personal or verbal thank you, an email or personal note to the individual, sharing achievement in team meetings, a day off for a job 

well done, Give an employee more autonomy, Offer flexible work schedules or work options, Giving employees  with a computer upgrade, mentor other colleagues etc.

Types  of  Monetary incentive/Reward The Process to be followed Parameter basis which reward is given Approval No. of rewards

Merit  Pay

It depends upon the job assigned. Higher the performances better the reward.

Rewarding performance of an employee


HOD, Director, Finance, and HR.


Profit sharing Plan

Company offer share in the profits to the employee as a common incentive for giving motivation in the workplace.

High level of extraordinary work is rewarded.


HOD, Director, Finance, and HR.



Pay and allowance

Pay hike and allowance are linked with the performance of the employee.

Extraordinary efforts put in by an employee in a given task.

HOD, Director, Finance, and HR.

Depends on the individual to individual



The Commission is offered to employees generally working under the sales dept. More order means more commission.

The Individual with special skills is recognized and rewarded.


HOD, Director, finance, and HR.


Top 5 performers in the sales department


Stock option

Many companies that offer a share in management or participation in management along with the share in profit as an incentive to get efficient working from the employees.

Exhibition of leadership skill is another way to reward employees. Leadership skills used in getting the complex job done demands reward.


Management decision in consultation with Director finance and HR.


Depends on the company to company setup. However, the number cannot exceed 10% of total employee strength



When an employee reaches the target or exceed the target then they are paid the extra amount, this extra amount is known as the bonus.

Extraordinary efforts put in by an employee in a given task.


Management discretion


Depends upon the employee strength


Suggestion Plan

This is another type of incentive in which an employee is rewarded if any suggestion given by employee gives gains to an organization.


One time outstanding idea which helped the company as a whole.


Director, HOD, HR.



Extra benefits like medical facility, free education, housing facility.

These are related to the performance of an employee


The Employee has done a job well despite being complex; such employees are appreciated and awarded.

Director, HOD, Finance, and HR.


Informal Rewards:

Type of reward



No of rewards

Parameter is chosen

Personal or Verbal thank you

The immediate manager say a thank you or send a thank you card

No Approval


No Limit but should be done only for extraordinary work.

Work was done above normal duty



An email or personal note to an individual

Sends an email appreciating employee work with a cc to the whole team

No approval


Same as above


The Outstanding effort which benefited department as a whole

Sharing achievement in team meetings

Achievement shared in Team meeting generally shared by the department head.

No  approval


Same as above


Higher quality work consistently


A day off for a job well done

Extraordinary work done by the employee, a day off given to the employee

HOD  approval


Same as above


Any extraordinary work is done which has increased the image of the department

Flexible work schedule

Flexible work timings are given to the employee for a period of one month.

HOD approval

Same as above


Exceptional contribution in getting the work done

Formal Recognition:


Types of Reward

Norms to be followed



No. of rewards

Parameter basis which reward is given

Pan India

Career  advancement

Manager motivates employees to give their best performance so they can be promoted to the next level.

Immediate manager and HOD


Manager need to confirm names of employees for promotion however it can be given only to a few employees depending on extraordinary work

Doing service above the normal routine with good performance track

Pan  India

Job enrichment

Challenging assignment given

Immediate manager, HOD, and director


Only too few ones

Doing work more than own duty

Pan India

Employee Participation in decision making

Having a say in decision making encourage employees to work more sincerely

Management and director decision


Very rare, only to one or two employee

only to exceptional extraordinary talented employee

Pan India

Diamond star

Employee recognition by giving mementos

Immediate manager, HOD, and director


The Employee who has done the job well  despite being complex


Pan India

Year of service award

Award is given when an employee completes the certain number of years in service

HOD and director


Long service stay

As per demand

Branch level

Peer to peer recognition

Award is given to the employee by an employee

Immediate manager and HOD


Helping others even after fulfilling one's own duty

As per demand

Branch level


Celebration chart

Post it pasted, extraordinary work recognized by writing notes on celebration chart

Immediate manager and HOD


Extraordinary work performed by an employee/team

As and when required

Branch level


Framed letter of appreciation

The Formal letter of recognition, duly signed by senior mgmt.

HOD and senior management

As and when required

Higher quality work consistently

As and when required

Pan India


Team Trophy

The Trophy is given to a team

HOD, Director

In a yearly event

Exceptional work by the team


Branch level



The dedicated corner in company's newsletter

Monthly space in the wall of fame

Immediate manager, HOD

Monthly chosen for each branch

Outstanding performance by an employee


Branch level




Team training

Special training session organized for the team

Immediate manager, HOD, Director

Yearly event

The Initiative was taken by the team to work on special projects


Branch Level

Team lunch with CEO

The Team has overachieved targets assigned to it



Overachievement of target

Best 3 teams

Pan India

Achievement published in the employee newsletter

Exceptional performance by an employee which has benefited department as a whole

Immediate manager and HOD


Work that has benefited the department as a whole


Branch level







Team Jersey

The Special task performed by the team, details mentioned at the back of the jersey

Immediate manager, HOD, and HR


The Special task performed by the team,

Best 3 teams

Budget: Budget will be allocated by the finance department. The finance department is responsible for allocation of budget in a fair and equitable manner that all employees have equal opportunity to benefit from the reward. The Budget may be reallocated as appropriate. 

Nomination Process:



 prize in company - hrhelpboard

Selection Criteria:

Selection criteria must be documented as part of the Employee Reward and Recognition Program. The Finance department may designate an individual or committee, working in conjunction with the Human Resources Representative, to develop specific award standards and selection criteria, and to nominate or select award recipients.

The Effectiveness of policy:

The effectiveness of policy is monitored by the HR team to ensure the policy is applied fairly.

Review of the policy:

The policy may be reviewed at any time on request of staff or management but will be reviewed yearly automatically. 

Sample Policy - II

Reward and Recognition Policy Sample

Employee Reward and Recognition Policy for Employees


Purpose: reward and recognition policy is designed to encourage employees whose performance is outstanding either individually or through teams that contribute to the overall objective of the organisation and also to lay down guidelines regarding” how to reward employees”.


   purpose of reward and recognition



Objective: The objective of reward and recognition policy is to promote motivation in the workplace and to build up culture that is conducive for achieving organisational objective and to make employees feel valued and appreciated for their good work done.  It is meant

  • To promote reward and recognition of the employees

  • To appreciate and recognize value added contribution of the employees.

  • To acknowledge individual and team contribution.

  • Timely appreciation to foster work quality.

  • To award staff appreciation for the good work done


   reward and recognition  -principle-hrhelpboard


     Basic principle followed for reward and recognition policy is                 mentioned below:

  1. To promote  Staff appreciation

  2. To enhance motivation in the workplace

  3. To design an effective Incentive Programme

  4. To  value the effective work done by rewarding work

  5. Consistent reward and incentive scheme with a defined objective.

  6. Empowering employees byrewarding performance

  7. Reward to nurture a sense of ownership amidst employees.


Eligibility for Reward and Recognition

Following criteria must be fulfilled before an employee become eligible for reward and recognition

  1. Employee must be a regular employee of the company

  2. Should  be  in service of the company for last 6 months

 reward and recognition - eligibility-hrhelpboard


Qualifying outcome for reward and recognition

  1. Exhibition of organisational mission and goals while performing the duty

  2. Exceptional contribution in increasing motivation in the workplace

  3. Efficiency in Process and Practice which leads to rewarding work

  4. Exceptional team building skills

  5. Innovative approach towards problem solving based on organisational values

  6. Cost reduction which is essential for an effective incentive programme

  7. Increment in revenue generation

  8. Excellent customer service

  9. Contribution in building team members competencies

  10. Excellence in all spheres of work done which results in Staff appreciation

  11. Contribution in employee engagement initiative

  12. Contribution in achieving organisational objective by performing  service above normal duty

  13. Going out of ways to form positive and inclusive work environment

  14. Exceptional contribution  in CSR  related activities

  15. Developing  new work methods that reduce waste

  16. Individual possessing highest  talent are rewarded

  17. Going the extra mile by performing duties when department is short staffed.

  18. Highly efficient in process and practice







  Reward - Qualifying outcome - HRhelpboard

reward and recognition at workplace

Reward and Incentives at the workplace

Reward and incentives are beneficial both for the employee and the employer. It not only increase motivation in workplace but also energises employee to work with proficiency. Generally this question do occupy minds of managers that how to reward employee?  Rewarding performance is an art. This reward and recognition policy is designed for employee rewards and recognition programme. Such Staff appreciation results in increasing employee efficiency and an increase in sales and productivity. An effective incentive programme must include both monetary as well as non monetary incentives. .With rewards and incentive employer and employee enjoy a positive and productive work environment.  An incentive programme which recognizes individual achievement in addition to team performance can provide extra incentive for employees.



Ways or Types of reward & incentives:

Monetary Incentive Reward - Various types of monetary incentive reward includes Variable pay, bonus, profit sharing and Stock Option. Details on the same are mentioned below.


 Ways /types of reward - hrhelpboard

Variable Pay:  Variable pay can be tied to the performance of the company, any organisational accomplishment or an individual performance or both. It is given as one time reward. Still it is one of the motivational programmes for reward and recognition. Details of variable pay can be referred in Compensation and benefits policy. 

Bonuses: Bonus is used to reward individual accomplishment. It is one of the most commonly used types of incentive. By rewarding performance of an employee for previous year, bonus gives motivation in workplace.

Profit Sharing: In this money is disbursed by taking a certain percentage of employee salary. This is credited to employee account at the end of financial year.  It is given in Cash form. This employee reward motivates an employee to work beyond normal duty to improve upon business performance. However these types of incentive require an employee to vest certain number of years with the organisation before receiving any money.

Stock Options:  This reward and recognition method is very popular nowadays. In these types of incentive an employee has the right to buy a specified number of a company’s share at a fixed price for a specified period of time. The question does arise on how to reward employees so that they remain motivated for a long time. Stock option is the answer.

Stock options are authorised by a company’s board of directors and approved by its shareholders.  This employee reward is given by a certain percentage of the company’s shares outstanding.
Non monetary type of incentive:  Non cash reward programme works better than cash as it promotes improvement in team work, increasing customer satisfaction and motivation in workplace among other programmes.  Reward and recognition has a timing element. It is must to occur for staff appreciation. if High 
rewarding performance continues then reward & incentive can be one of the factor for it. Both reward & recognition programmes have their place in business. By rewarding performance business will have an edge in competitive market place. Non monetary incentive reward employee performance with opportunities other than related to monetary incentive. It includes flexible work hours, training opportunities and ability to work independently. Such programme motivates employee as there is learning of new skills and pursuing the advance opportunities



 rewards and incentives -hrhelpboard

The Various types of non monetary rewards & incentives:


Employee rewards have been divided into following categories.

Branch Level Reward: This includes Individual level Reward and on the spot rewards and given for rewarding work.

Regional level Reward: This includes rewards given to Best Teams at regional level.

Pan India level Reward: This includes Employee of the year reward, Invention of the year award, cost saving strategy of the year, most efficient operations award, employee engagement practice of the year.



Types of Reward




Approval Required

Timings of the Reward


Certificate of Recognition

Any work done by the employee exception ally well

Branch Level

To recognize individual efforts for doing work extra ordinarily

Immediate Manager HOD

As and when required quarterly basis

Event organized at branch level

Linked in Recommend action

Individual possessing the highest talent with extruding any skills

Branch Level

To recognize individual efforts for doing work extra ordinarily

Immediate Manager HOD

As and When Required

Linked in Recommendation as and when required


“ON THE SPOT “Reward

 Types of  Rewards




Approval Required

Timings of the Reward



Company  apparels




Going extra mile and performing work beyond own duty 

Branch  Level

To motivate and inspire the employee

Immediate Manager/HOD


As and when required



Lunch with HOD / Senior Management Team









Any Innovative idea which has helped achieving the given task at hand




Branch Level



To recognise employee skills  held




Immediate Manager/HOD


As and When required

Regional Level Rewards

“Team of the region “

reward policy of hrm -hrhelpboard

It includes “Employee of the year award “, “Invention of the year award”, “Cost saving strategy of the year Award ”, “Most efficient operations award ”,  “Employee engagement  practice award “Best safety practice award”.PAN India level rewards

Types of Reward




Approval required

Timings of the Reward



Employee of the year award

Excellence in all spheres of the work done

PAN  India

Recognize commitment towards setting excellent benchmark by an individual

Senior Management


PAN India event

Invention of the year award

Excellent initiative to improve upon Process/ Practice

PAN India

To recognize the initiative that resulted in  improvement in process/ practice

Senior Management


PAN India event


Cost  Saving Strategy of the year Award





Cost reduction ,

Improvement in revenue generation

PAN India

To recognize the strategy that resulted in cost reduction

Senior  Management


PAN India Event


Most Efficient operations award





Strategy that resulted in tangible benefits to the company in terms of operational efficiency

PAN India

To recognize the strategy that resulted in Operations efficiency

Senior Management


PAN India Event

Employee Engagement practice of the year Award

Going out of ways to form inclusive work environment

PAN India

To recognize practice that has resulted in Improved productivity due to inclusive work environment

Senior Management


PAN  India Event

Process followed for Branch level Reward 

Reporting manager recognize the contribution of the employee


Reporting Manager seeks HOD approval on the same


Approval Received 


Award Shared at an event organised at branch level also shared as and when required in case of LinkedIn recommendation

Process followed for Regional Reward

Reporting Manager Send Team nomination to HOD, (nomination to be sent in given timeline)


HOD Consult with Regional HR committee, Regional committee takes telephonic round of interview, names of shortlisted candidates shared with Corporate HR for approval


Nominations sent to Corporate HR for approval if approved 


                          Rewarded in regional level event