Points-based reward programs are highly effective in influencing employee behaviors, whether that is engagement, productivity, safety, wellness or other types of outcomes. But, why does it work? Let’s dive more into the reasoning behind why points-based rewards are effective for helping employees to reach their full potential.


The common thinking is that cash bonuses work as incentives for performance. While it may sound nice to receive a lump sum of cash in return for reaching a sales goal or for some other accomplishment, it has been proven that physical, tangible items work better as positive reinforcement for achievements. The problem with a cash reward is once that cash is used, whether it is for paying taxes, paying off debt, or even for some other type of item an employee wants, it is gone and the reinforcement value is gone as well.

With a points-based reward, employees can get an item they want immediately for the amount of points they have or they can bank points and save up for a particular item. So, every time they get points they get the satisfaction of using those points or steadily saving points to get an item that is important to them personally. Once they receive that item – whether it’s a big screen TV or a grill or a laptop computer – every time they use it they will remember how they got it – through their own productivity or achievements. They will remember the projects they worked on, the recognition they received from their peers and their manager, and how they felt when they received that recognition.

That’s why it works. Recognition appeals to their psychological need to be recognized and appreciated. A points-based reward program provides easy communication and participants understand what they need to do to be recognized.


So, how can you keep making sure you maximize your points-based program? Let’s start with strong and purposeful communication. 

Give Frequently and Fairly

If managers receive a bucket of points to give recognition, but forget to give points or are stingy about giving recognition, then the program won’t work. Also, if managers constantly reward the same employees and aren’t fair about how they give rewards, the incentive of giving points won’t work. Employees will see them as a perk they’ll never benefit from.

Managers need to be reminded of the value of the rewards program as a way to influence their team members to do their best work. To do this, they need to give rewards frequently, consistently and fairly.

Communicate the Perks

Recognition programs need to be communicated and marketed consistently and regularly. They should also incorporate all three forms of recognition: Formal, In-Formal and Day-to-Day Recognition. 

If employees receive points rewards but constantly bank points without ever using them, then the program loses effectiveness because employees never actually see the reward from the points they received. So, employees also have to be reminded through communication about the program and that they need to use their points.

Take Advantage of the Seasons

Regular seasonal communications work best. For example, now is the time to remind employees about all the items they can receive through the points program that they can use all summer. Items like grills, camping equipment, boating or swimming accessories or summer travel items.

Encourage Peer-to-Peer Recognition

Lastly, companies can encourage peer-to-peer recognition by giving each employee a bucket of points they can use to recognize their co-workers. Then they should be encouraged to give points. Nothing builds camaraderie like receiving real recognition from a colleague. This is a great way to build a culture of recognition within your company that starts from leadership and managers to every person in the organization.

Is Your Business Maximizing Points-Based Rewards?

Properly promoting your points-based reward program – reminding managers of the overall purpose of it, as well as encouraging employees to take advantage of it – will help your company reap the benefits that come from a rewards and recognition culture. Need help with your team recognition program? Download our Total Recognition Checklist to get started!

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C.A. Short Company partners with companies to manage, drive and facilitate increased employee engagement to increase financial performance, productivity, quality, and core performance outcomes. Our process and research-based platform enables executives and managers to engage their teams to increase the bottom line, motivate staff, and incentivize positive behavior. To Request a Complimentary Consultation, click here.

*This blog was originally published on May 28, 2017 and was updated on December 22, 2020 for accuracy. 


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