The Difference Between Reward And Recognition

Reward and recognition are two words that people use interchangeably.

Unfortunately, they fail to know the difference between reward and recognition.

Why is it crucial to know the difference between reward and recognition?

Motivating and appreciating employees to positively influence their productivity is the key to retaining the best employees in an organization.

As much as money is essential, employee satisfaction is equally crucial; this is where reward and recognition come into play.

Let’s look at the difference between reward and recognition.

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Practical Difference Between Reward And Recognition

As mentioned above, knowing the difference between reward and recognition is key to keeping your employees.

Here are the differences between reward and recognition:

Rewards Are Proportional To Accomplishments And Goals

Usually, organizations develop a program in which employees do something to earn a living.

A reward is a way to encourage employees to give their best and can incentivize people to want to work for the company.

However, you should be careful not to create a culture in your company where employees feel entitled to rewards. 

Employers should set rewards for exceptional work and achievements.

Recognition Is More Cost-Effective

It can be difficult for businesses to reward employees at all times, especially small or medium-sized firms where budgets may be tight.

Recognition is not expensive. Managers do not need to ask the top team for a budget to write an email celebrating the great work done by the employee.

Recognition can happen again and again.

There is a big difference between reward and recognition. One can receive recognition repeatedly, which means people don’t have to wait to receive praise for their well-done work.

And because recognition is not expensive, it can be a staff-led initiative. 

Firms use an employee recognition platform so co-workers can easily and publicly recognize their peers’ fantastic work.

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Rewards Are Transactional, While Recognition Is Relational

Recognition is a personal compliment or thanks for an excellent job, and they can give it to anyone in the firm at any time.

Although, a reward is usually a tangible gift given to a task by its manager or team member to celebrate something they have accomplished in context.

Recognition Is Not Transferable, While Reward Is Transferable

Recognition cannot be removed from a given or modified person and is permanent. Focus on achieving that kind of eternity through recognition while utilizing tangible rewards to create immediate effects.

On the other hand, rewards like cash, gifts, and gift cards can be passed from one person to another and are temporary. 

Rewards Are Conditional, While Recognition Is Unconditional 

Recognition is usually very independent and is not part of a fixed effect based on specific actions. It is about combining durability and flexibility or knowing when to use one over the other.

Rewards, however, are very dependent on specific terms or conditions. 

Employees Expect Rewards Most Times While Recognition Comes As A Surprise

With recognition, the recipients do not know it is coming their way. Never embarrass anyone by not giving them the reward they deserve; learn to be automatic by appreciating and celebrating people daily.

It seems that, with rewards, we go into a situation knowing that if we perform well, we deserve the reward.

Reward Is Economical While Recognition Is Emotional 

Recognition is a psychological and emotional event, a felt phenomenon. That is where recognition shows strength; it’s the recognition and not rewards that so many employees are craving.

Reward Is A Product Of Outcome While Recognition Is Behavior-Driven

Recognition can occur whenever one observes the excellent behavior of another.

On the other hand, rewards can enhance the results obtained, such as when someone achieves a specific income goal or discovers a fixed lead.

Recognition Flows While Rewards Are Fixed

Recognition flows freely from one person to another. 

In contrast, rewards are fixed and determined based on desired performance and expected returns. 

Recognition Is Personal While Reward Is Impersonal

Recognition differs because it is based on people’s communication, celebrating who they are, and appreciating what they do.

In contrast, rewards, except travel rewards, have little human dimension due to their tangible, contractual nature.  

Ways Employees Receive Recognition In Contrast To Reward

Here are ways employees receive recognition:

Posting Recognition

Posting recognition on corporate social media or in-company chat channels is an easy and effective way to improve character among team members, especially if your team is still working remotely.

Constructed Email

An email or note that applauds an employee’s efforts is a personal act that can make them feel reassured and appreciated.

Ways Employees Receive Reward In Contrast To Recognition

Here are ways employees receive a reward:

Food And Management

A common way for organizations to express their appreciation for employees is to eat and drink. 

There are ways to provide this reward via office snacks, cooked lunches, or company parties.

Financial Rewards

Cash prizes can be a special gift card to a team member’s favorite business or a regular VISA or American Express gift card.

Most of the time, cash prizes refer to gift cards.

Extra Time To Rest

Rest is a great way to rejuvenate after a busy season, and the staff loves their time.

An effective way to reward employees for their hard work is to give them paid time off.

It could be a company-wide trip or a special reward for each employee for doing more in particular situations.

Organizations can move forward and provide cost-effective travel for their employees.

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How To Effectively Differentiate Reward And Recognition

Here are effective techniques to differentiate reward and recognition:

1. Be Creative

Enjoy your reward and ideas for recognition. 

Develop ways to recognize and reward different groups, departments, and individuals in ways different from their achievements, needs, and needs.

2. Keep Recognition And Criticism Separate

Avoid a scary compliment sandwich. Employers should not use recognition to minimize the impact of criticism. While the answer is essential, try to keep the two separate.

3. Reward The Right Thing

Make sure you balance your reward with recognition with your company’s work, vision, and values.

4. Make It Shared

Let everyone be a part of your prize and recognition system. Employees feel happy about being recognized but also recognizing the work of their peers. 

Encourage employees always to praise each other and consider creating a plan that allows people to nominate colleagues for awards.

5. Make It A Practice

If leaders and managers set a standard of shared recognition, it will soon become part of the company’s culture and something everyone wants to be a part of.

6. Be Open

Recognition and rewards show everyone the kind of behavior you want other employees to show. And if you feel the need to keep the reward confidential, you may need to reconsider your position.

7. Be Fair

Look at the small ones whose quality work may not be evident and do not create company awards that employees or specific departments can only obtain.

8. Find Out What To Watch

Calculate the behavior and actions you want for employees and ensure everyone in your company has an equal chance of being recognized.

9. Make It On Time

To maximize your efforts, take immediate action. Give recognition or an easy reward as soon as you see the behavior you would like to see again.

10. Do It Many Times

As mentioned earlier, people long for recognition. Look for small and unique ways of seeing employees regularly.


Organizations need to understand this difference between reward and recognition to enable them to execute them appropriately and retain their best employees.

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