Difference between Award and Reward

Awards and Rewards involve recognizing and acknowledging achievements or contributions. Awards are typically formal honours or distinctions given due to a competitive process, whereas Rewards are incentives or recognition given to individuals or groups for specific actions or behaviors. Awards are often associated with prestige, while rewards motivate and reinforce desired behaviors or outcomes.

An award is a formal recognition or honor bestowed upon an individual, organization, or entity for their excellence, achievements, contributions, or significant accomplishments in a specific field, industry, or endeavor. Awards can take various forms and are typically associated with prestige, honor, and public recognition.

Features of Award:

Recognition of Excellence: Awards are bestowed upon individuals or teams in recognition of their exceptional performance, achievements, or contributions towards the organization’s goals.
Motivational Tool: They serve as a potent motivational tool by acknowledging and appreciating the hard work and dedication exhibited by employees, thereby encouraging them to continue striving for excellence.
Promotion of Positive Culture: Awards foster a positive work culture by promoting healthy competition, teamwork, and a sense of pride and belonging among employees.
Enhancement of Employer Brand: Organizations that regularly recognize and honor their employees with awards tend to have a stronger employer brand, which helps in attracting top talent and retaining skilled professionals.
Cultural Integration: Awards often reflect the organization’s values and cultural ethos, reinforcing desired behaviors and aligning employees with the company’s mission and vision.

A reward is something given or received in return for one’s efforts, services, or achievements. It can be tangible, such as money, gifts, or prizes, or intangible, such as recognition, praise, or opportunities. Rewards are often used as incentives to encourage certain behaviors or outcomes. In various contexts, rewards can play a significant role, whether in business, education, psychology, or personal development. They can reinforce positive behavior, motivate individuals to achieve goals, and foster a sense of appreciation and satisfaction.

Features of Reward:

Incentivizing Performance: Rewards are designed to incentivize and reinforce desired behaviors, such as achieving targets, demonstrating leadership qualities, or exhibiting innovation and creativity.
Customization: Rewards can be customized to suit individual preferences and motivations, ensuring that they resonate with the diverse workforce in India, which may have varying cultural backgrounds and aspirations.
Timely Recognition: Unlike awards, rewards are often more immediate and tangible, providing instant gratification and reinforcement for exemplary performance or behaviors.
Retention Tool: Effective reward systems can contribute to employee retention by demonstrating that the organization values and appreciates its workforce, thus fostering loyalty and commitment.
Alignment with Organizational Goals: Rewards are closely linked to organizational objectives, with incentives often tied to Key Performance Indicators (KPIs) or strategic initiatives, ensuring that employee efforts are directed towards achieving company goals.

Basis	Award	Reward
Meaning	An award is typically a formal recognition or honor bestowed upon an individual, organization, or entity for achieving excellence, outstanding performance, or significant contributions in a particular field, industry, or endeavor.	A reward is a tangible or intangible incentive or recognition given to an individual or group in recognition of specific actions, behaviors, or achievements.
Purpose	It is primarily aimed at recognizing and honoring achievements, excellence, or contributions in a specific field, industry, or endeavor.	It is designed to incentivize and reinforce desired behaviors, actions, or outcomes, and focuses on motivating individuals or groups to achieve specific goals or targets.
Process	It involves a competitive process where candidates are nominated, evaluated, and selected based on pre-defined criteria. There might be judges or panels involved in the decision-making process.	There’s a pre-determined set of criteria or performance metrics established by the organization or employer. The recipients are chosen based on meeting or exceeding these criteria.
Criteria	An award is granted based on excellence, outstanding performance, innovation, leadership, or other criteria relevant to the specific award category.	A reward is given for meeting pre-defined targets, goals, or expectations. It can be related to achieving specific sales figures, completing projects on time, or demonstrating exemplary behavior.
Form	It can take various forms such as certificates, trophies, plaques, medals, honors, titles, or monetary prizes. It often includes a formal ceremony or event for presentation.	It can be tangible (e.g., monetary bonuses, gift cards, vouchers) or intangible (e.g., public recognition, praise, promotions). The form may vary depending on organizational policies and practices.
Recipients	An award is given to individuals, organizations, or entities in recognition of their accomplishments, contributions, or achievements.	A reward is typically given to individuals or teams within an organization for specific actions, behaviors, or outcomes.
Timing	It is often presented on a periodic or one-time basis, such as annually, quarterly, or for lifetime achievements. It may involve nominations and evaluations over an extended period.	It can be given regularly (e.g., monthly or quarterly bonuses) or as one-time incentives (e.g., for achieving project milestones). It’s often tied to short-term goals or performance targets.
Impact	It can have a lasting impact on the recipient’s career or reputation as it is associated with prestige, honor, and public recognition.	It focuses on short-term performance improvements and does not have a lasting impact.

How are awards and rewards determined?

The criteria for awards and rewards vary depending on the context and purpose. In some cases, they may be based on objective measures such as performance metrics or competition results. In others, they may be subjective, relying on judgments or nominations from peers, supervisors, or experts in the field.

What types of awards and rewards are common in the workplace?

Common workplace awards and rewards include Employee of the month/year, performance bonuses, recognition certificates, promotions, special privileges or perks, and public praise or acknowledgment.

Are awards and rewards taxable?

Awards and rewards can be taxable depending on their nature and value. In many cases, cash rewards or prizes are considered taxable income and must be reported to tax authorities. Non-cash rewards may also be subject to taxation based on their fair market value.

How can organizations create effective award and reward programs?

Effective award and reward programs are often tailored to the organization’s culture, values, and goals. They should be transparent, fair, and consistently applied. It’s important to solicit feedback from employees and regularly evaluate the program’s impact to ensure its effectiveness.

What role do awards and rewards play in employee engagement and retention?

Awards and rewards can play a significant role in enhancing employee engagement and retention by recognizing and reinforcing desired behaviors and outcomes. They contribute to a positive work environment, foster a sense of appreciation and belonging, and encourage employees to stay motivated and committed to their work.

What is an Award?

Features of Award:

What is Reward?

Features of Reward: