How Rewards Are Different From Recognition


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Hard Working Employee

Gratitude comes in many different forms and how you express it can make a huge difference. In your business, it is extremely important to show your appreciation for the contributions your employees make to your success. However, we often get the act of rewarding our employees confused with showing them recognition. While many may believe the two are one and the same, there are some distinctive differences between them. Understanding this difference can give you valuable insight your business can benefit from.

Tangible vs. Intangible

Rewards are generally tangible gifts that your employees can experience and feel. They have a finite quantity that is easily determined. While they can come in many forms, they will have some type of physical quality about them. It could be a specific dollar amount, a trophy, plaque, or time off from work to do whatever you want. Recognition, however, is not tangible. You can recognize someone without any physical representation.

Transactional vs. Relational

Rewards have a transactional value associated with them. If the employee does “X” then he will be rewarded with “Y”. A reward is usually given as a payment for work done. On the other hand, recognition involves an exchange that is more personal. You could recognize an employee when you see them work with a deeper and more personal interaction. Doing so can cement a relationship that could last for many years.

Consumed vs. Experienced

Rewards are also consumable, so at some point they will be used up. Once used up, they may be quickly forgotten. Sometimes it has a monetary value as in the case of a company bonus, which will one day be spent. If it is tickets to a concert or an extra day off from work, it will be used. Recognition is more in line with a personal experience that can remain in one’s memory for a lifetime.

Transferable vs. Non-transferable

Rewards can be transferred or given to other people and are usually temporary in nature. Because they are tangible, they can be regifted to other people or shared with family or coworkers. On the other hand, recognition is not a fixed entity, it can only be used by the recipient no matter what form it takes.

Conditional vs. Unconditional

Rewards are given based on an employee meeting certain conditions. Generally it is given to employees who excel at any specific task; whether it is related to his day-to-day work or the way he handles customer service matters, the employee should be rewarded. Rewards are the consequences of certain actions whereas recognition is more independent and is not given as a result of any specific behavior or action. The basis for giving a reward is usually rigid but the foundation for recognition can be flexible.

Expected vs. Surprised

In most cases, employees know when they are going to get a reward. They often enter into a situation knowing that if they are successful, they will be rewarded. Recognition though, is most often a surprise. Because it is independent of any type of fixed result or directly connected to a specific action, it usually comes completely without warning.

Monetary vs. Emotional

Rewards require the use of resources to motivate employees. The recipient receives a gift that has some level of monetary value connected to it. However, recognition is more of a psychological and emotional gesture. It involves the heart more than the logistical thinking of the mind.

Outcome vs. Behavior

The purpose of a reward is to encourage a certain outcome. If a worker does this then he will receive that. The focus is generally on achieving a certain result. Recognition, however, does not have a specific end result in mind. It focuses almost entirely on changing a certain behavior so that a person’s ongoing performance is improved. It can be given at any time when positive behavior is observed in an effort to encourage continuing that behavior.

After observing the differences between rewards and recognition, it is easy to see that rewards may on the surface appear to be the same as recognition, but their tangible and predictable nature have little to do with the human experience. Employers will do well to create a nice balance between the two to make sure that they do not neglect the human factor that plays a role in all aspects of the work environment.

Himanshu Agarwal
Himanshu Agarwal is the Founder & CEO of a Digital Marketing firm SmartWeb. He is an online market analyst, startup strategist and a writer. He has written on several topics including content marketing and technology. When not writing or on laptop, he loves spending his time reading inspiration books and watching movies.


  1. Rewards are transactional and have some monetary value attached to them and Recognition is relational and has an emotional value attached to it. Himanshu, thanks for sharing this interesting information here. People generally get confused with recognition and rewards. Keep sharing such insights.


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