What's the Difference Between Rewards and Incentives in HR Management?

The Difference Between Rewards and Incentives

The difference between rewards and incentives is that they are given for different reasons and are perceived differently by employees. Rewards are given to employees for meeting specific goals and acknowledging an employee's hard work, while incentives are offered to encourage specific behaviors or to achieve specific objectives to stimulate employee performance.

Rewards are often given as recognition of an employee's hard work and contribution to the organization. Rewards can take various forms, such as bonuses, promotions, public recognition, or company-wide events. The purpose of rewards is to acknowledge an employee's accomplishments and to motivate them to continue performing at a high level. Incentives, on the other hand, are offered to employees to encourage them to perform a certain behavior or to achieve a specific objective.

Incentives are designed to stimulate employee performance and are often tied to performance targets or goals. For example, a company might offer an incentive for employees to meet a sales quota or to complete a project within a certain timeframe. Incentives can be monetary or non-monetary and can take the form of bonuses, gift cards, time off, or other rewards. So, rewards are given to employees for meeting specific goals and acknowledging an employee's hard work, while incentives are offered to encourage specific behaviors or to achieve specific objectives to stimulate employee performance.