What is the difference between incentives and rewards

The main difference lies in the timelines in which each is offered. A reward is offered after the job is completed and after the employee proves his worth. An incentive is offered beforehand and is aimed at improving performance of employees who are not meeting expected standards or established goals.

While rewards are benefits given to employees that are currently performing well, incentives are given to employees whose performance is not up to par. An incentive is an encouragement to perform better and once the employee meets the expected goals the incentive becomes a reward in which the employee gets the promised benefit. There are a number of major benefits of both rewards and incentives.

One difference between a reward and incentive is the time line. You offer incentives before work starts and offer rewards after the work is completed. You give rewards to employees who already perform well while offering incentives to employees who aren't yet up to par.

The reward is the prize that you give your employee as a result of offering the incentive program, so in a way the incentive is a cause and the reward is an effect. It makes sense as a manager to set up an employee recognition program that uses both incentives and rewards. To improve the level of performance, various system or programmes are implemented, such as reward and recognition, incentives and so forth. Hence, reward system, reward strategy, reward policy, incentive plan, incentive programme, incentive structure, etc.

So, let us start the discussion on the difference between reward and incentive. Basis for Comparison Reward Incentive Meaning The reward can be understood as a prize given to someone, so as to recognize an employee's hard work or achievement. The incentive is anything which motivates, or encourages an employee, to achieve something.

What is it? A tangible item that is given to congratulate and celebrate success or achievement. Motivational factor designed to tune the desired behavior.

Predetermined No Yes Nature Retrospective Forward-looking Involves Providing monetary or non-monetary recognition for achieving a goal, or attaining a certain level of skills. Motivating people to complete targets or level up their performances. Find out what you need to know about rewards systems for employees including how they work, how to create your own and plenty of reward ideas. Learn what you need to know about the importance of employee engagement and what you can do to make significant improvements.

Redeem Book a demo. The definition of a reward is: a thing given in recognition of service, effort, or achievement, or; a fair return for good behaviour Put in simple terms, a reward is something which is actually given to an employee, whereas an incentive is a motivating factor.