Differences Between Incentive Awards and Recognition Awards

Many companies offer reward programs to increase production and efficiency.  There are many different ways to reward employees, but awards usually fall in two categories:  incentive and recognition.  While both awards work toward shaping great employees, there are some fundamental differences between the two.

Focus

The focus of recognition awards is to set apart a certain behavior of an employee after the fact.  An example would be being named employee of the month for perfect attendance at work.  Recognition awards focus on acts that have already been completed.  In contrast, incentive awards focus on behaviors that have not yet occurred.  These are often rewards for working toward and completing a goal.  An example would be offering cash bonuses for reaching a target production number.  Incentive awards encourage and shape desired behaviors.

Rewards

Recognition awards are often non-material, such as special acknowledgement or an assigned parking spot.  Incentive awards tend to be more material, and can include things like money or prizes.  Coveted rewards, like a day off or special treatment, can be both recognition and incentive awards.

Effectiveness

While both types of awards are effective, incentive rewards tend to have higher success rates.  Incentive awards more actively reward desired behaviors, making then great for encouraging employees to work hard for a goal.  Recognition awards are seen as more passive, not requiring as much from the employee and therefore not as rewarding.  Recognition awards can be seen as given to an employee and not earned, and therefore making the employee undeserving in the eyes of others.