A tangible reward is a reward that has a financial value and can benefit the worker. When your employees go out of their way to do a great job, you may want to reward them. You have two options here.

One is an intangible reward, which has no monetary value. This might include a verbal “thank you” or a day off. The other option is a tangible reward, such as movie tickets or a cash bonus. 

Tangible rewards are given periodically to employees to motivate them and to show appreciation. They are typically awarded only once a specific goal has been reached. For example, tangible rewards may be given to a team if they meet a specific project deadline. Rewards can include things like gift cards, bonuses, and tickets to a sports game.

Why Give Tangible Rewards?

Tangible rewards make an impact.

They can improve employee morale and happiness

Workers appreciate being appreciated. Tangible rewards are also fun because there’s an element of surprise. Employees may not know they’re about to get an award. Just like any gift, it can be a treat.

They can improve productivity

When teams know they can earn a prize by working hard, this can inspire them. Rewards can also create a healthy sense of competition. Teams may see others getting recognition and strive to perform even better to get their own reward.

Or, employees may strive to outdo their own personal best to get a nicer bonus. Research backs up the idea that rewards and productivity are linked. A study published in The Accounting Review found that sales professionals outperformed their peers when given non-cash, tangible rewards.

Equally, a 2022 study published in Accounting, Organizations and Society found that tangible rewards could have a positive impact on employee motivation, in part because these rewards offered novelty and a chance for workers to focus on their wants, such as fun times at a movie, rather than needs represented by income spent on food and shelter. Research from Deloitte also concludes that companies with a strong recognition program see 14% higher performance, engagement, and productivity when compared with competitors. Small rewards can yield big results!

They can boost employee confidence

Confident employees may be more likely to speak up and offer ideas because they feel more assured in their abilities. Some workers have confidence, but every employee can benefit from a boost.

Tangible rewards can improve worker confidence because they show your team members they’re doing good work. This can create a positive cycle, where a reward makes workers feel more assured of their abilities, they produce greater outcomes, they are rewarded again, and they continue to feel more positive about their skills. 

They can help you retain talent

Workers who feel encouraged and appreciated may be more likely to stay. Tangible rewards such as bonuses can also help employees financially. Workers who are awarded cash or another tangible reward may be more likely to stay because their overall compensation is better with the addition of bonuses or other value-adding rewards.

Tangible Reward Ideas

Are you looking for ways to say “thank you”? Here are some fun gifts you can give your team.

  • Tickets to events, including sporting events, movies, festivals, or concerts
  • Subscriptions to streaming sites, apps, or online classes
  • Cash bonuses or pay raises
  • Physical items, such as hats, jackets, t-shirts, mugs, watches, computers, phones, tablets, or other gifts
  • Gift cards
  • Memberships in clubs or gyms
  • Travel vouchers or trips
  • Company-branded gear, such as bags, hats, phone cases, and other items
  • Gift baskets
  • Games
  • Art
  • Food, including boxes of chocolate or meals at local restaurants
  • Services, such as meal delivery, a personal chef service, or house cleaning services
  • Contributions to education accounts or towards student loan payments

You may have more than one type of reward at your company. In fact, it’s best if you do. Tangible rewards are not a one-size-fits-all solution.

They’re most effective when they fit the interests and needs of your employees, so the sports fan can enjoy sports tickets while the film buff can enjoy access to a movie streaming site.

Knowing your team can help you match the right tangible reward to each employee. 

How To Implement Tangible Rewards in Your Workplace

Once you have established what kind of rewards you would like to hand out that fit your budget, it’s time to think about how to reward your employees. You may get better results if you create a formal system.

While you may think it would be good to have an informal process that lets you reward workers on the fly as and when you see great work, a formal system can keep rewards consistent and allow you to track which employees received rewards and when.

With a plan, you can stay on budget and reward good work consistently, so no one feels left out. Here’s how. 

Decide who can give rewards

At most companies, it’s leadership, managers, or supervisors who decide on and give out rewards. Whoever takes on this task will need to keep track of who is getting prizes and when. This can be done with spreadsheets shared among managers or with a system like Connecteam recognition and rewards, which lets you see the history of your reward program.

Occasionally, you will want to review your giving strategy with your managers to determine if it’s working. You may want to make adjustments if you see an opportunity to improve. For example, you may notice a chance to enhance productivity and results by changing the types of rewards workers are getting. Or, you may need to adjust your budget.   

Once you decide who gives rewards, make sure they have a budget. That way, they can purchase rewards that are right for their team. A clear budget can offer managers choice and flexibility, allowing them to change the type of rewards they give out over time, or to choose to hand out a range of smaller rewards or a few large prizes, depending on what they feel would work for best their team.

Another option is for the company to purchase various prizes at the start of the year or month to hand out. These could include movie passes, company-branded shirts, and other items. Managers could then choose from these items when they wanted to give out a reward. The advantage of this option is that there would always be rewards on hand for employees. 

Survey your team

Some workers may prefer cash while others would be thrilled with tickets to a concert. Use a platform like Connecteam surveys to find out what kinds of rewards would most motivate your teams. You can also ask workers individually and note down their preferences.

Define your reward strategy

Consider what would merit a reward. This could be a specific sales benchmark or the completion of a certain number of projects. Try to define what is prize-worthy in a way that gives everyone an equal chance of getting a reward.

If you want to reward the highest number of sales, for example, you might also want to reward the largest jump in sales numbers. This way, you’re rewarding effort and not just top performers. Newer employees who are making an effort but may still be learning how to perform their best in their roles will have a chance at prizes this way, making your strategy fairer. 

Think about how you will give rewards. Will they be given publicly or privately? Will they be sent digitally or given in person? Will employees have a choice in what rewards they choose?

Deciding ahead of time can help you understand how your system will work.

Once you know who will hand out prizes, when, and how, be sure to run your ideas by your financial department or accountant. Some bonuses and cash rewards may be subject to tax withholdings. Most non-cash items, such as movie tickets, are not affected. Still, you will need to keep records and make sure you’re tax compliant.

Address some of the potential challenges of tangible rewards

While there are many benefits to rewards, there can be some drawbacks, too. After a while, handing out rewards may start to create a certain expectation. Employees may begin working mostly for the gifts or bonuses and may feel less motivated without them. Some workers may start to feel less motivated by prizes that used to be exciting as they get used to a certain level of extra reward.

In addition, tangible rewards cost money and require effort to distribute. Worse, if your high performers are always the ones being recognized in this way, it can create resentment. Employees who rarely win may feel left out. The system may feel unfair to them or they may think rewards are based on favoritism or bias.

So how can your organization address these issues? First, be aware of these potential challenges and make sure any rewards system accounts for them. You can offset some of these possible issues by keeping track of who wins which rewards and when, and by rewarding effort as well as results in order to make the system more equitable.

You can also give out different types of prizes and hand them out less often. This way, employees will receive both small and large rewards, and they’ll never be sure which kind any future reward might be. This way, rewards will remain a true (and occasional) treat rather than something expected. 

When it comes to staying within a budget, some companies tie rewards to revenue and financial goals, only handing out rewards if these targets are met. This way, there is extra money for the rewards program, meaning the rewards budget won’t drain your finances. Workers may also be more motivated when they see that rewards are tied directly to their efforts, which can encourage them to see rewards as within their control.

You should also consider paring tangible rewards with intangible rewards. You don’t want to overlook intangible rewards. Combining the two in your rewards program helps give different feedback to your workers.

A tangible reward like a bonus can show a worker that you value them, while an intangible reward like a note expressing appreciation can help you build connections.

An intangible reward like a promotion or new role shows your employee you’re investing in their career, while a tangible reward like concert tickets can be fun and promote work-life balance. 

Implement a rewards system

A formal recognition and rewards system can simplify the process for you. It allows managers to show appreciation in minutes if they have rewards—like gift cards—on hand to give out. You can also control costs by setting a clear budget. Using a digital system can make it even simpler and faster to hand out rewards, and enables you to see your rewards spending at a glance, making budgeting even easier. 

Connecteam employee recognitions and rewards, for example, lets you offer tangible and intangible rewards in one convenient, digital platform. Send badges, personal messages, and tokens to teams or individuals. Employees can convert tokens into gift cards for their favorite brands, meaning workers always choose something that they want.

A study by O.C. Tanner found that 70% of employees prefer personalized recognition. Giving workers a say in what rewards they choose is a great way to personalize the experience. 


Tangible rewards give your employees evidence you appreciate their work and efforts. These rewards have monetary value, and can improve productivity and employee retention. Whether you choose to hand out gift cards, festival passes, cash bonuses, or other tangible rewards, these are concrete ways to show your appreciation for a job well done. You can also combine tangible and intangible rewards to make a greater impact. 

Everyone likes their hard work to be acknowledged, and implementing a strong rewards program can help you motivate your team. A strong recognition system is one that ensures performance and effort are rewarded so everyone has a chance to be appreciated. A good system also ensures prizes are personalized and tracked for best results. You can implement a digital rewards system to make the process of recognizing your employees even easier.

Motivate Your Teams to Put Their Best Foot Forward

Recognize employees for their outstanding performance and drive a culture of excellence with tangible rewards using Connecteam.