An internal awards system is one of the employee retention strategies. Awards reinforce desired behaviors and motivate employees to perform better. An effective internal rewards system is a great feedback tool that increases employees’ engagement and satisfaction. Read the article to find out more.

Internal awards – table of contents:

  1. Internal awards
  2. Motivation and commitment
  3. Rules of rewarding
  4. Types of rewards
  5. Proceedings before the court of arbitration
  6. Summary

Internal awards

The creation of an adequate motivational system in the organization is a complex and hard task. The selection of internal awards is determined by many factors, such as the branch, the organization operates in, and the employment structure. It has to be remembered that there is no ready-made catalog of awards, that will suit all situations and professional groups.

Employees, depending on their age and professional stage can have completely different expectations regarding the methods of reward. For example, young, single employees will be satisfied by the possibility of getting a gym membership or swimming pool card.

But when considering employees, who are already parents, this type of reward will be inappropriate. For those employees, financial rewards are more desirable. Despite the type of award, the fact is that the award system is the indispensable element of employees’ motivating system that aims to increase their engagement in the realization of professional tasks. The awards system increases employees’ identification with the company.

Motivation and commitment

The level of commitment of employees is closely related to their motivation. If the organization expects high productivity and strategic goals realization then it is necessary to use the right motivational tools. Motivating the employees is a process connected to the management of human resources, which influences and consciously shapes the behavior of the personnel to make possible the achievement of key organizational goals.

There are two types of motivation: internal and external. External motivation applies to the stimulation of positive behaviors through external impulses used by the employer, for example, financial awards. Internal motivation means that the employee wishes to get good results because it is consistent with their character and internal beliefs.

The right approach to the matter of employee awards plays a key role in shaping work engagement. According to the policy of human resources management, the main task of supervisors is the encouragement of personnel to active co-participation and creation of work environment. Work dedication can be described as the positive approach of the employees to the organization and its values.

An active employee is aware of the business context and works to improve efficiency for the benefit of the company. Moreover, such an employee speaks well of the company, wishes to stay in employment, and in the realization of tasks goes beyond the parameters of his duties.

Rules of rewarding

To get the expected results coming from rewarding employees it is worth following specific rules. The award system should be connected with the aims of the company and its predefined mission.

The form of an award should be an encouragement for the employees. The catalog of attractive rewards should be defined and transparent. The financial award is usually more desirable and well-remembered if it is given with a document or an object.

The award giving should have solemn character and be performed in presence of the whole personnel. The value of the award should not be adequate to the achieved results. The awards should be of different value.

The candidates for the award should receive a recommendation not only from the immediate supervisor but coworkers as well. Particularly great and positive achievements of employees should be rewarded fast.

The rules and regulations of reward should be clear, transparent, non-confidential, and known to all employees. Praise is a type of reward as well. The expression of appreciation should be practiced in presence of other individuals. It motivates employees and increases their self-esteem.

Types of rewards

While deciding on the method of rewarding the employees one should remember that this is a tool of managerial staff that aims to increase the effectiveness and productivity of employees. The reward can be divided into financial and non-financial. Withing the non-financial awards we can distinguish the awards that can reflect financial value (car, phone, gift card) and those, which don’t reflect any financial value such as public praise.

The most efficient form of non-financial rewards is praise, words of appreciation, and invitation to participate in an interesting project, trip, or training. Among the financial award, the role of premium for the commitment raises in recent years. The other important non-financial motivator is professional development opportunities, which can be seen as a reward, especially if it means that the employer pays for the postgraduate studies of the employee.

internal awards

Benefits of the internal award system

Before the implementation of the internal award system, the organization has to see the real advantages of such a solution. The most frequently listed benefits of internal awards are:

  • Better work results, increase in productivity, and effectiveness of realized tasks. Greater work satisfaction for employees.
  • Development of creativity and innovativeness among the employees, that more eagerly come up with new ideas and initiatives.
  • Lower level of absenteeism. Satisfied employees are not stressed, which means they get fewer sick leaves.
  • Reduction of turnover. Well-motivated employees don’t search for new employment and are strongly connected to the organization.
  • Good reputation of the organization related to the right creation of engagement of employees that increases positively the efficiency of recruitment activities.


Internal awards are one of the tools that shape the motivation and engagement of employees. One has to remember that the awards have to be selected to fulfill their function. The award that has no value for the employee brings no expected result and becomes an unjustified cost for the company. Well-designed award system constitutes a high potential that can be used to manage human resources effectively.The appreciation makes the employees feel well, perform their duties better and stay connected to the organization throughout the years.

Read also: Global leadership trends in business for 2022 and 2023

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Author: Nicole Mankin

HR manager with an excellent ability to build a positive atmosphere and create a valuable environment for employees. She loves to see the potential of talented people and mobilize them to develop.