Employee rewards are the tangible things a company gives people in return for contribution: gift cards, points, cash, time off, experiences, swag, donations, and opportunities, attached to recognition of what the person did. Rewards are the tangible layer on top of employee recognition. Recognition is the message; the reward is the proof the company meant it.
In 2026 the interesting question about employee rewards is not whether to offer them but how: what people actually want, how much is enough, and why programs with big budgets so often produce less appreciation than programs with small ones. This guide answers those questions with Matter’s published platform data on redemptions and reward habits, Matter’s 2026 survey of what employees prefer, and primary research from Gallup, Deloitte, Great Place To Work, and O.C. Tanner. We build Matter, which runs employee rewards inside Slack and Microsoft Teams, so read the product references with that in mind. The advice applies whether your rewards live in a platform or in an envelope in a drawer.
Last verified September 2026.
The short version
Employee rewards are the tangible side of recognition, and they work when they arrive attached to a specific thank-you rather than as a standalone perk. The research says people want choice more than cash and growth more than bonuses, and the platform data says small, frequent rewards get redeemed and remembered while large, rare ones sit unclaimed. The one practice that matters most is coupling: every reward should ride on a message that names what the person did. A program can start at a few dollars per person per month, and much of the best reward material (time, choice, a public thank-you) costs nothing. Start by fixing the recognition habit, then add a modest, predictable reward budget that peers can spend on each other, and let people pick what they redeem.
What is an employee reward?
An employee reward is something of value given to an employee in acknowledgment of a contribution, a milestone, or a result. The value can be monetary (a bonus, a gift card, points that convert to money), experiential (a day off, a dinner, a trip), material (swag, a gift), charitable (a donation in the person’s name), or developmental (a course, a conference, a stretch assignment). An employee rewards program is the structure around that: who can give rewards, from what budget, for what, through which catalog, with what approval and reporting.
Three distinctions keep employee rewards programs honest.
- Rewards vs. recognition. Recognition is the acknowledgment: who did what, and why it mattered. A reward is the tangible thing attached to it. Rewards without recognition are compensation by another name; recognition without rewards works, and most of it happens that way. Our pillar guide to employee recognition covers the message side; this guide covers the tangible layer.
- Rewards vs. incentives. An incentive is announced in advance to drive a target (hit the number, get the trip). A reward arrives after the fact and was not promised. Incentives are a sales and operations tool; rewards are a culture tool. Both have a place, and mixing them up is how a rewards program turns into a second comp plan.
- Rewards vs. benefits and perks. Benefits (health insurance, retirement contributions) and perks (snacks, gym discounts) are given to everyone for being employed. Rewards are given to someone for something they did. The moment a reward becomes an entitlement, it stops rewarding.
Employee rewards also come in two economic shapes. Monetary rewards (cash, bonuses, gift cards, convertible points) have a face value and are usually taxable. Non-monetary rewards (time off, public praise, growth opportunities, experiences, choice of project) have no face value and are often the ones people remember longest. A good program uses both and does not assume the monetary one is the stronger.
Why employee rewards matter: what the research shows
The research on employee rewards is mostly research on recognition, because rewards are effective only as part of it. Here is what the primary sources say, grouped by outcome, and what Matter’s own data adds about how rewards behave in practice.
What people prefer. 54% of professionals prefer a verbal thank-you for day-to-day accomplishments, and 31% prefer a written one. For significant accomplishments, 47% would rather have a new growth opportunity than a salary increase (21%) or a bonus (10%), and 49% prefer recognition shared with a few people over broad public recognition (18%) (Deloitte, 2019, more than 16,000 professionals surveyed 2017 to 2018). For everyday work, people want to be told. For big work, they want a door opened. Cash comes third.
Personalization. Only 10% of employees have been asked by someone at work how they like to be recognized. Employees who strongly agree they get the right amount of recognition are 4x as likely to say someone at work encourages their development (Gallup, 2022). A rewards program that offers one thing to everyone is built on a question nobody asked.
Engagement. Just 14% of employees receive recognition at least weekly, and only 25% receive feedback that often. When employees get both weekly feedback and weekly recognition, 61% are engaged, compared with 38% for those who get weekly feedback but less frequent recognition (Gallup, October 2024, Gallup-Workhuman survey of 4,439 U.S. employees). Rewards inherit this: a $25 gift card every few weeks does more than a $500 award once a year, because the frequency is what the engagement effect is attached to.
Retention. Just 22% of employees say they get the right amount of recognition for their work, and well-recognized employees were 45% less likely to have turned over two years later (Gallup, September 2024, longitudinal study of nearly 3,500 employees from 2022 to 2024). Separately, employees are 7x more likely to stay another year when recognition helps build relationships (O.C. Tanner, 2026, 4,243 respondents in 10 countries). That second finding is the case against rewards that arrive from a system with no human attached.
Fairness and effort. People who feel recognized at work are 2.2x more likely to drive innovation, and when employees believe everyone has a fair chance at special recognition, they are 56% more likely to give extra effort (Great Place To Work, 2025, analysis of 1.7 million employee survey responses from 2018 to 2020). Rewards make fairness visible in a way words do not: everyone can see who got the gift card.
Authenticity. Employees who strongly agree their recognition is authentic are seven times as likely to say they are treated with respect, four times as likely to feel connected to their organization’s culture, and six times as likely to trust managers and leaders (Gallup, 2023, 10,026 working U.S. adults). A reward can make recognition feel more sincere (the company put something behind it) or less (the company put something in place of it). The difference is whether the message came with it.
What employees say they want, in 2026. Matter’s State of Employee Recognition and Rewards 2026, a survey of 1,021 employed U.S. professionals recruited through an independent third-party research panel (Cint) between June 30 and July 13, 2026, asked which rewards people prefer: cash (57%), paid time off (42%), and gift cards (30%) lead. But the same survey found that employees who are recognized rarely want a monetary reward at three times the rate of employees recognized weekly (30% vs 10%), and across the full sample, sincere thanks (21%), a specific personal message (20%), and public acknowledgment from leadership (20%) all rank ahead of monetary rewards (17%). Read together: people ask for money most when nobody is thanking them.
How rewards behave in practice. In The Recognition Habit, Matter’s 2026 Benchmark Report, built on aggregate, de-identified platform data across thousands of teams and 76,000+ members over the trailing twelve months, the median reward redemption is $30 and 40% of redemptions are under $25. Habit teams, the ones with a weekly recognition ritual, redeem 78% of earned coins vs 27% for everyone else, and 77% of reward coins are earned through peer kudos rather than top-down awards. Those teams also give about 2.5x more recognition per member than ad hoc teams. The findings are correlational: they describe what rewards look like on teams with different habits, not a controlled experiment. Small and frequent beats large and rare, and it is the recognition habit, not the reward budget, that predicts whether rewards get used. All of Matter’s studies live at Matter’s research hub.
Types of employee rewards
Most employee rewards programs draw on five or six of these. The point of listing them is to notice which ones your program leans on and which it has never tried. A fuller taxonomy, with examples for each, is in our post on the types of employee rewards.
Monetary rewards
Cash bonuses, spot bonuses, profit sharing, and prepaid cards. Monetary employee rewards are the most requested (57% of employees in Matter’s 2026 survey put cash first) and the least remembered: money folds into the paycheck and the memory of why it arrived fades. They are also the most expensive to administer, because cash is always taxable and often runs through payroll. Use them for significant, measurable contributions where the amount would be insulting if it were small, and always with a written explanation of what the money is for.
Points and gift cards
The workhorse of modern rewards programs. Peers or managers give points with a message; points convert to gift cards, prepaid cards, or catalog items. The strengths are choice (the recipient picks), scale (a catalog covers every country and taste), and coupling (the points ride on the recognition). The design decision is whether points accumulate toward big redemptions or reset regularly and keep amounts small. Matter’s data favors small: 40% of redemptions are under $25, and the median is $30. Our guide to employee rewards gift cards covers denominations, catalogs, and the mistakes.
Experiences and time off
An extra day off, a long weekend, a team dinner, tickets, a class. Paid time off is the second most wanted reward (42%) in Matter’s 2026 survey, it has no catalog fee, and it is the reward people describe to their families. The cost is real (the work still has to get done) but it is a cost that reads as generosity rather than spend. Give time off publicly and schedule it on the spot so it is actually taken.
Swag and physical gifts
Company-branded items, curated gifts, books, food. Swag works as a reward when it is good enough that people would have bought it and rare enough that it signals something. It fails as a reward when everyone gets the same hoodie in week one. Print-on-demand and self-fulfillment models mean you no longer need a closet of inventory, and a physical thing mailed to a remote employee’s home lands differently than an email.
Charitable rewards
A donation in the employee’s name to a cause they choose. Charitable employee rewards are the answer for people who are uncomfortable receiving money and for companies whose values include service. They also have the useful property of being public without being awkward: announcing that a colleague’s work funded a donation is easier than announcing the size of their gift card.
Growth and development rewards
A course, a conference, a certification, a stretch assignment, a mentor, an introduction. Deloitte’s finding that 47% of professionals would rather have a new growth opportunity than a raise or a bonus after a significant accomplishment is the most underused result in the rewards literature. Growth rewards cost time and attention more than money, and they are the ones that change a career.
Rewards for participation
Small rewards for doing something the company needs everyone to do: completing a survey, finishing onboarding, joining a wellness challenge, referring a candidate. These are closer to incentives than rewards, and they work. In Matter’s 2026 Benchmark Report, coin rewards roughly double pulse survey completion (39.6% vs 19.6%, survey-weighted across 84,000+ pulse surveys), 98% of teams attach coin rewards on custom surveys, and 90% of challenge claims get approved. Keep participation rewards small and separate from recognition rewards so the two do not blur.
How to reward employees well: 7 principles
These principles are the difference between an employee rewards program that people talk about and one that finance quietly cancels in year two.
1. Attach every reward to a message
The reward is the tangible layer on recognition, so it should never travel alone. A gift card with no note is a transaction; the same gift card under three sentences naming what the person did is a memory. If your platform or process lets someone send a reward without writing anything, change the process. This is also the cheapest way to make rewards feel authentic, which Gallup’s research says is what unlocks trust.
2. Small and frequent beats large and rare
A $500 annual award reaches one person once and teaches everyone else that rewards are for someone else. Twenty $25 rewards over the same year reach most of the team and keep the behavior visible every few weeks. The platform data is unambiguous: the median redemption is $30, 40% of redemptions are under $25, and teams with a weekly recognition habit redeem 78% of what they earn while everyone else redeems 27%. Budget for frequency, and let the big awards be the exception.
3. Let people choose
Only 10% of employees have ever been asked how they like to be recognized. Rewards are the easiest place to fix that: offer a catalog with gift cards, time off, donations, and swag, and let the recipient pick. Choice also solves the global problem. A team across ten countries cannot share one gift card, but it can share a catalog. If you run global and distributed teams, a reward the recipient cannot redeem locally is not a reward.
4. Let peers give
Rewards that only managers can give reach only what managers see. On Matter, 77% of reward coins are earned through peer kudos. Give everyone a small, regular allowance to spend on colleagues, keep the amounts modest, and reserve the larger, approval-based rewards for managers and formal awards. Peer-funded rewards also make the program feel like the team’s rather than HR’s.
5. Make it fair and visible
Great Place To Work’s finding that a fair chance at recognition raises extra effort by 56% applies with force to rewards, because rewards are countable. Publish the criteria, make the feed public, and check quarterly whether the same people always win. A rewards program that concentrates on one department or one manager’s favorites does measurable damage to everyone else.
6. Budget predictably
The two ways rewards programs die are a budget nobody can forecast and a liability nobody noticed. Accumulating points create a balance-sheet liability that grows until people redeem; month-end point dumps spike spend. Fixed per-member allowances that reset regularly keep the ceiling known, and paying only when a redemption is approved keeps cash from sitting idle. Sizing the budget is the first question finance and procurement will ask, so have the per-member number ready before the pitch.
7. Handle tax and admin before launch
In most jurisdictions, cash and cash equivalents such as gift cards and convertible points are taxable income to the employee regardless of amount, while certain low-value non-cash items and some length-of-service awards may be treated differently. Rules vary by country and change; this is a general note, not tax advice. Confirm the treatment with your payroll provider or tax adviser, decide whether the company will gross up, and write the policy down before the first reward goes out. It is far easier than explaining a surprise on a payslip.
Employee rewards examples and ideas by budget
Employee rewards ideas are only useful if they fit a budget and a person, so these are grouped by cost, with the type of contribution each suits. Longer lists live in our posts on employee rewards ideas and employee rewards examples.
Rewards that cost nothing
- First pick of the next project or the next conference slot.
- A public thank-you from the CEO or a skip-level, in writing, naming the work.
- A late start or early finish on a day the person chooses.
- Ownership of a decision they would normally need approval for.
These are the growth-and-autonomy rewards Deloitte’s respondents preferred, and they are the ones a small company can give before it has any budget at all.
Under $10
- A coffee eGift card attached to a peer kudos, sent the same day.
- A handwritten card mailed to the person’s home.
- A small donation in their name to a cause they picked when they joined.
Do not apologize for the amount. A large share of what people redeem is in this range, and the note is what they keep.
$10 to $25
- A lunch delivered, for the person or for the two people who solved the problem together.
- A book related to the work, with a note inside the cover.
- A gift card in the recipient’s local currency from a catalog they chose from.
$25 to $100
- A half day off, scheduled on the spot.
- A curated gift box or a piece of swag good enough to be worn outside the office.
- A class, workshop, or subscription the person has mentioned wanting.
This is where the median redemption sits, and where a reward starts to feel like an event without becoming a compensation question.
$100 and up
- A full day or two of paid time off, given publicly.
- A conference or certification of the person’s choosing, travel included.
- A team dinner or outing tied to a specific delivery.
- A spot bonus with a written explanation of what it is for.
Reserve this tier for significant contributions and formal awards, and make sure it is reachable by anyone, not only by the sales team.
Gift card rewards done right
Gift cards are the default employee reward for good reasons: instant, global, and chosen by the recipient. The ways to get them wrong are also well known: a single brand nobody uses, denominations too large to give often, cards that expire, and cards with no message. Offer a catalog, keep denominations small, deliver inside the tool where the recognition happened, and never send one without a note.
Experience rewards
Tickets, a dinner, a class, a trip, a day at something the person loves. Experiences are the rewards people describe to other people, which makes them the best value per dollar for culture. Make them personal (ask, or use what colleagues know) and make them convenient (book it for them).
Swag that people keep
Good swag is a reward; default swag is inventory. Choose two or three items that people would buy on their own, let the recipient pick, and use print-on-demand or self-fulfillment so nobody manages a closet. Tie swag to milestones and awards rather than handing it out in bulk.
Charitable rewards
Let people redeem points or a fixed amount as a donation, and announce the total the team has given each quarter. This is the reward for the person who says they do not need anything, and it aligns the program with values without a memo.
Team rewards
A shared reward for a shared result: the launch dinner, the day off after the audit, the budget for the team to spend on itself. Team rewards recognize work that cannot be attributed to one person and reinforce the message that the company notices collaboration, not only individual heroics.
How to build an employee rewards program
An employee rewards program should be built on top of a recognition habit, not instead of one. The compact version has five steps; the full step-by-step guide to employee rewards programs goes into budgets, catalogs, approvals, and rollout in detail.
- Get the recognition habit first. If people are not already thanking each other in public every week, a rewards budget will buy a quarter of activity and then fade. Fix the message layer, then add the tangible one. The teams that redeem 78% of their rewards are the teams with a weekly ritual, not the teams with the biggest catalog.
- Decide the shape of the budget. Choose between accumulating points and a regular allowance that resets, set the per-member monthly amount (many programs start between $3 and $10 per person), decide who can give (everyone, or managers only), and decide whether rewards are paid on redemption or prepaid. Write down what you will do about tax.
- Choose where rewards live. Rewards should be given and redeemed where recognition happens, which for most companies is Slack or Microsoft Teams. Our guides to Slack apps for employee rewards and Microsoft Teams apps for employee rewards compare the options platform by platform. A spreadsheet and a stack of gift cards is a legitimate version one for a team of twenty.
- Launch with a catalog and a story. Show the team what they can redeem (gift cards, time off, donations, swag), show them the first three rewards given by leaders with the messages attached, and state the rules in one paragraph. Speed matters: on Matter, almost half of teams (46%) send their first recognition within 15 minutes of setup, 1 in 3 within 5 minutes, and the figures are identical on Slack and Teams. The reward layer should be live the same week.
- Review quarterly. Look at redemption rate, distribution across teams, the peer share, and what people actually redeemed. Cut catalog items nobody uses, raise or lower the allowance based on redemption, and retire any reward that has become an entitlement.
If you are under fifty people, steps two and three can be a shared document and a company card. Build the structure when the number of people giving rewards is larger than the number of people who can remember the rules.
How to measure employee rewards
Measuring employee rewards means checking whether the tangible layer is doing what it is for: making recognition more visible, more frequent, and more fairly distributed. The reference points below are from Matter’s 2026 Benchmark Report.
- Redemption rate. Earned rewards that were actually claimed. Habit teams redeem 78% of earned coins; everyone else 27%. Low redemption means the catalog is wrong, the amounts are too small to bother with, or people have forgotten the program exists.
- Median redemption value. Platform-wide it is $30, with 40% of redemptions under $25. If your median is far higher, rewards are probably rare and top-down; if it is far lower, check whether the catalog has anything worth saving for.
- Peer share of rewards. The percentage of reward value that originated in peer recognition rather than manager awards. On Matter it is 77%. Under half means the program depends on managers remembering.
- Reward-attached recognition. The share of recognition messages that carry a reward. This varies widely by industry and there is no right number, but a sudden rise usually means people have started giving rewards without messages.
- Distribution. Rewards per member by team and by manager. A program that is fair on paper and concentrated in practice shows up here first.
- Budget per member and forecast accuracy. What you spent per person per month against what you planned. Predictable spend is what keeps the program funded.
- Participation-reward outcomes. For rewards attached to surveys or challenges: completion rate with and without the reward (coin rewards roughly double pulse completion on Matter), and the approval rate on challenge claims (90% platform-wide).
- Recognition survey items. One or two pulse items (I feel valued for the work I do; rewards here are given fairly), tracked as a trend rather than a score.
Report these on one page each quarter alongside the recognition metrics. Rewards are the part of the program with a line in the budget, so they are the part that has to show its work.
Employee rewards software and tools
Employee rewards software adds the things a spreadsheet and a drawer of gift cards cannot: a catalog the recipient chooses from, delivery in the recipient’s country and currency, rewards attached to the recognition message where it was given, allowances that reset on a schedule, approvals for larger amounts, and reporting on redemption and distribution. It also removes the administrative failure mode where one person buys, tracks, and mails everything until they stop. Our roundup of employee rewards software compares the platforms on catalog, fees, and platform support.
Matter is our own entry: employee rewards software that runs natively inside Slack and Microsoft Teams, with no separate login, and takes about two minutes to set up. Feedback Friday™ (US Patent 12,199,935) prompts the team weekly; give-coins reset weekly, earned coins never expire. There is a Free plan for unlimited users and a 14-day free trial of paid plans. Basic is $1 per user/month, billed annually; Pro, which adds rewards with 10,000+ eGift card options across 200+ countries, company swag (print-on-demand or self-fulfillment), and challenges, is $3 per user/month, billed annually. Rewards are billed separately and only when an admin approves a redemption, custom rewards cost nothing, and the plan comparison is on Matter’s pricing page.
The honest concession: a twenty-person team with a public kudos channel, a monthly $10-per-person gift card budget on a shared card, and a manager who tracks it in a spreadsheet has a working employee rewards program. That setup is enough until you need choice across countries, rewards that peers can give without asking, redemption reporting, or a program that outlasts the person running the spreadsheet. Buy software when administration starts costing you frequency, not before.
Frequently asked questions about employee rewards
What are employee rewards?
Employee rewards are tangible things a company gives an employee in acknowledgment of a contribution, milestone, or result: gift cards, points, cash bonuses, paid time off, experiences, swag, charitable donations, or growth opportunities such as a course or conference. They are the tangible layer on employee recognition, and they work best when attached to a specific message about what the person did.
What is the difference between employee rewards and employee recognition?
Employee recognition is the message: acknowledging who did what and why it mattered. An employee reward is something of value attached to that message. Recognition works on its own, and most of it happens without a reward. Rewards without recognition read as payment. Matter’s State of Employee Recognition and Rewards 2026 survey found employees recognized rarely want money at three times the rate of employees recognized weekly, which suggests the demand for rewards is often a demand for acknowledgment.
What rewards do employees actually want?
In Matter’s 2026 survey of 1,021 U.S. professionals, cash (57%), paid time off (42%), and gift cards (30%) were the most preferred rewards. Deloitte found that for significant accomplishments 47% of professionals would rather have a new growth opportunity than a salary increase (21%) or a bonus (10%), and for everyday work 54% prefer a verbal thank-you. The practical answer is choice: a catalog that includes time off, gift cards, donations, and development.
How much should an employee reward be?
Smaller than most programs assume. On Matter, the median reward redemption is $30 and 40% of redemptions are under $25, and teams with a weekly recognition habit redeem 78% of what they earn compared with 27% for everyone else. Small, frequent rewards attached to specific recognition outperform large, rare ones. Many programs budget between $3 and $10 per member per month and reserve larger amounts for formal awards.
Are employee rewards taxable?
Generally, cash and cash equivalents such as gift cards, prepaid cards, and points that convert to money are taxable income to the employee regardless of amount. Certain low-value non-cash items and some length-of-service awards may be treated differently depending on the country. This is a general note rather than tax advice; confirm the treatment for your jurisdiction with your payroll provider or tax adviser before launching a program.
What are examples of non-monetary employee rewards?
Non-monetary employee rewards include an extra day off or a late start, first choice of the next project, a public thank-you from a senior leader, a conference or course of the person’s choosing, a mentor or introduction, a charitable donation in their name, a team dinner after a delivery, and swag good enough that people wear it. Deloitte’s research found growth opportunities are preferred over raises and bonuses for significant accomplishments.
How do you start an employee rewards program?
Start an employee rewards program by establishing a weekly recognition habit first, then setting a modest per-member budget that everyone can spend on colleagues, choosing where rewards are given and redeemed (usually Slack or Microsoft Teams), offering a catalog with choice, writing down the tax treatment, and reviewing redemption and distribution quarterly. A team under fifty can begin with a kudos channel, a shared card, and a spreadsheet.
The bottom line
Employee rewards are the tangible layer on recognition, and they only carry weight when the recognition is there first. The research says people want to be told, want choice, and want growth more than bonuses; the platform data says small, frequent, peer-given rewards get redeemed and large, rare, top-down ones do not. Fix the habit, set a modest budget everyone can spend on each other, let people choose, and measure redemption and fairness. If you want the allowance, the catalog, the celebrations, and the reporting handled inside Slack or Teams, that is what we built Matter to do.
