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Rewards and Gifts

Understanding the difference

Excuse the pun, but understanding rewards and gifts, and using them as a tool in your toolbox, can be one of the most rewarding exercises you can engage in as a leader.

As a point of departure, you need to know that rewards and gifts are not either or, they are both and. You need to know when to give gifts, and you need to know when and how to reward, and you need to understand the difference.

Very few of us do anything without an incentive. What incentivises us might be different, but we still need to be incentivised. You might be thinking “They have a job and I am paying them, that should be enough incentive.” Or “Why should I incentivise them for something I am paying them for?” Fair comment, but if that is your approach then you will get the bare minimum out of your conscientious team members, and much less out of the others.

The business or work relationship is a simple one. It is just an exchange of value, and it only works when the exchange is fair for both parties.

Reward questions

When working with leaders I ask these two questions:

  1. Are you rewarding your team?
  2. What are you rewarding?

Are you rewarding your team?

You need to understand and implement rewards. You need to have rewards that the whole team is involved in, and you need to have individual rewards for each member. You need to understand the team and the members, and how they are motivated or encouraged, and therefore how they should be rewarded.

Some jobs or professions, like articled clerks or apprenticeships, do not lend themselves towards rewards. This should not stop you as a leader. There are things outside of the actual task, like behaviour or attitude, that can be rewarded. I often hear the phrase: “My team has no appetite for learning.” The most common reason for this is that there is no reward for learning.

What are you rewarding?

As a leader, we actually reward all the time. The question is, what are we rewarding?

Years ago, my brother observed that in the company he worked for there were two groups of people. The first group were disorganised and unproductive, and so they ran around looking very busy, but not doing much. The second group were organised and productive, and just got on with the job. Unfortunately, the ones who looked busy were being rewarded with recognition and promotion. The wrong behaviour was being rewarded.

How we respond to something is a form of reward. Showing appreciation is a type of reward. Not appreciating something or someone is also a type of reward.


To try and define my understanding of the difference between a gift and a reward, I have compiled these lists:

A gift A reward
Is not earned Is earned
Given for who you are Given for what you do
Is complex Is simple
Can disincentivise Can incentivise
For being For doing
Because I love you Because you did what we agreed
One way, no exchange An exchange
Has no expectation Has an expectation

Giving gifts

We all know deep down that getting gifts from Santa based on whether we have been “naughty or nice” is fundamentally flawed. Giving gifts based on achievement or behaviour can be incredibly problematic. Gifts are not the problem, but giving a reward and calling it a gift, or giving a gift and calling it a reward, is a problem.

Because this can be so problematic I know leaders who just shy away from it and do nothing. It is like stopping meetings because they are not working. You don’t switch from bad meetings to no meetings, you switch from bad meetings to good meetings.

Giving gifts is great, but even in a family environment at is usually only about three gifts a year (Birthday, Anniversary, Christmas), with some space for ad-hoc gifts that really mean something. Have you noticed that even with these gifts there is a sense of obligation?!

Why so difficult?

Some of you are wired in a way that you do the right thing no matter what the incentive. This is because in your world view, doing the right thing is your reward. This only applies to about 20% of us, so you need to see beyond how you see the world.

If you thought that the comments in the Hey Bob cartoon were a bit harsh then I am going to prove my point. The point is this: You will not put the effort in to instate an intelligent, meaningful, workable reward system if there is no reward in it for you!

Let’s look at some reasons why:

  1. It takes a lot of effort:
  2. I have stated that giving gifts and calling them rewards is problematic, and yet many companies do just that. The simple reason is that it is easier. Building an intelligent reward system takes time and effort.
  1. It is problematic:
  2. If you get it wrong it can be more of a disincentive than an incentive, so it is easier to stay away from it.
  1. There is no perceived incentive for you:
  2. It might look like it is not worth the effort, but I want to encourage you to think about it and devote some time to it. The results will be worth it.
  1. Insecurity:
  2. If you are insecure as a leader you will struggle to reward people. The added danger is that because you don’t reward, you give gifts. This, as has already been said, is problematic.

Things to keep in mind

If you are going to give rewards and gifts, and I highly recommend you do, then there are some things you need to think about.

  1. You need to give rewards and gifts, it is not either or.
  2. Make sure the reward correlates to the effort.
  3. Make sure that the reward is clear and measurable.
  4. Be very clear in your mind what rewards and gifts are before you start.
  5. Involve your team in the discussion.
  6. Agree on the rewards with your team before you start. An autocratic reward system is fraught with dangers.
  7. Reward people for being productive, not busy.
  8. Understand that what you see as a reward is probably not what the majority of your team thinks is a reward.
  9. For some of you, your love language is gifts. This adds a layer that you need to be aware of.


  1. I am using this in the context of a team in a company, but the same principles apply in a family.
  2. “Rewards” is one of 19 elements I look at in my Team Health Assessment. If you are interested in more information feel free to contact me.

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