Unboxing the Points-Based Rewards System

Points-based rewards programs are now predominant in employee recognition and reward expectations. Companies of all sizes are now utilizing the method to engage and reward employees. The preference isn’t due to a lack of options but because the point programs have consistently proved effective.

Points-based incentive solutions outperform other types of reward programs as the proprietary points can be used in a multitude of ways and appeal to the interests of a wide range of employees. The feature boosts program engagement and participation. Furthermore, the system enables quick adjustment to changing company needs, intended outcomes, and audience demographics.


While other incentive compensation programs can help drive performance toward a specific goal, a point-based reward system can encourage employees to work on multiple goals concurrently. Each task may be worth a different number of points in relation to the goal. The accumulation and distribution of points generate usable, measurable data that provides valuable insight into the interactions of participants with the reward program.

Points-Based Rewards System

What is a points-based rewards system?

Points based rewards system is a customized employee compensation solution or approach for rewarding employees in which individuals earn points for specific actions or behaviors. These points can then be redeemed for rewards or incentives such as discounts, merchandise, or unique benefits. Points-based systems are part of employee recognition programs. They are frequently tailored to the participant’s preferences and intended to encourage continued engagement and participation.

What systems aid in Redeeming points?

The points earned in the rewards system can be redeemed with the following:
a. Merchandise
b. Experiences
c. Gift cards

Benefits of Points-based Rewards System

Among the many benefits the points-based rewards system offers, some of them are:

The system encourages collaboration

The use of a point-based incentive program encourages community and collaboration. Social features, such as the ability to share progress and rewards with friends and family, are frequently included in the systems, which can cultivate a sense of community and support among participants. They promote a more harmonious workplace environment by providing pints to everyone who contributes to a goal rather than just the top performers.

Easy to recognise global workforce

Points-based systems enable individuals to earn and redeem rewards that are tailored to their preferences based on their location and interest. This type of incentive compensation program facilitates the process of recognizing the global workforce while also increasing engagement and motivation in all.

Flexible in nature

The point-based system is adaptable and can be easily customized to meet an organization or group’s specific needs and goals. Unlike other performance-based incentive compensation programs, the points-based method can reward a broad spectrum of behaviors and actions, making it a versatile and dynamic tool for various applications.

Employees are acquainted with the system

The system is simple and easy to understand, making it accessible to employees of all backgrounds and levels of experience. Users are provided with clear goals and their respective incentive points, so HR teams won’t need to create extensive training to explain the concept to them. Furthermore, most employees are already acquainted with the idea of a redeemable points-based program.

Reasonably priced option

Another feature that makes point-based incentives a preferred system for recognition is their low expenditure. Because it does not necessitate the purchase and storage of physical goods, it is less expensive to implement and maintain than other types of reward systems.

Facilitates frequent recognition

As the system allows employees to work toward various goals, they are more likely to return to the program. The process encourages long-term participation and loyalty in the recognition program.

Simple to follow

Points-based incentive compensation programs are simple to administer. When new employee begins working for the company, they can be given immediate access to the system. HR managers and department heads can effortlessly award points if they meet certain goals. Businesses can use the system to track and measure the effectiveness of their recognition programs, allowing them to make data-driven decisions on how to improve them.

Gamification potential

The system instills a sense of competition and allows for the process to be gamified. Leaderboards or other types of rankings that create a sense of competition and motivate individuals to strive for higher scores are common features of point-based systems.

The Flipside

Not everyone may receive the point-based rewards system well.

Some noted downsides are:

Rewards not liked by employees

Employees may dislike the rewards provided by the point-based system. They may want to use something other than the store or restaurant that is part of the redeemable rewards. In fact, they may be less motivated after learning that the reward is for a specific restaurant or store.

Points redemption is low

Employees may forget about their points and rewards or fail to redeem them before the expiry date or move on to new jobs.

Transactional perception

Sometimes this type of program could develop transactional relationships in which employees act solely for the sake of earning points.

Delayed gratification

An incentive compensation program based on points does not provide immediate gratification. Employees can be rewarded immediately with cash or gifts for their behavior or achievement of a goal in other types of rewards. They will, however, have to wait until the end of the designated period to redeem or accumulate enough points under the point-based reward system.

With the right company support, a digital platform can mitigate some of the above concerns effortlessly.

True value of the Point-based Rewards System

Companies employ point-based reward systems as it is held in high regard. They have a greater emotional appeal to employees than cash. Emotional pull creates an intrinsic connection between the employee and the company.

As the system creates a social-emotional impact and a higher level of satisfaction in employees, it results in better word-of-mouth promotion for the company. The system is helpful when it comes to incentivizing specific behaviors and tracking and measuring the effectiveness of rewards programs, as well as collecting valuable data about customer or employee behavior.

Points-based rewards programs are a memorable, meaningful, and motivating option for every organization keen to design an impactful rewards program.

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We are a team of content and feature writers with an expertise in the subject of employee engagement and Rewards & Recognition strategy within corporate. Our team comprises of creative writers and subject matter experts who love de-constructing various facets of employee engagement and recognition.