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Points Based Rewards System: A Complete Guide For HRs

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A points based rewards system is one of the most powerful and effective ways to motivate and recognize employees. They work well in driving organizational outcomes like engagement, productivity, and retention.

But why do they work? And how to build a points-based rewards program?

In an attempt to answer these questions, this blog dives deeper into:

  • What a points based rewards system is,
  • Why it is effective in helping employees to reach their full potential,
  • And how you can go on about it.

Let’s start.

What Is A Points Based Rewards System?


A points-based rewards system allows you to show your appreciation for someone by offering them reward points. It is a tangible form of acknowledgment where points have a monetary value attached to them. That’s why employees feel great when they receive such rewards.

But say, you have accumulated points for your exemplary performance at work.

What are you going to do with the points?

Let’s have a look.

Ways To Redeem Rewards Points

This is the fun part.

Reward points empower employees to select the reward of their choosing. They can redeem points for your favorite merchandise, exciting experiences, and gift cards!

It is more feasible to give employees the power to choose their own reward. Also, it also creates a sense of excitement among them. Employees can save their points for a later date until they find a suitable reward to redeem their points on.



Employees can redeem reward points to buy a wide range of products from top global brands. Product types in merchandise stores can include apparel, footwear, home decor, electronics, accessories, sports equipment, and many more.


Employees can also use their reward points for booking adventure trips, events, and experiences. All the company needs to do is team up with vendors that offer travel packages to make reward points eligible for booking.

Gift cards

In a recent survey, employees were asked to choose a dream reward for meeting a goal at work. 44% of respondents strongly preferred a gift card.

A gift card is one of the most popular methods of employee recognition and can be easily integrated into the points-based rewards system. It is like a prepaid debit card of a specific value that you can use for a variety of purchases. Its value is derived by redeeming reward points.

There are two types of gift cards that can be used in the points-rewards program:

Closed-loop gift cards: They work with one particular store or a brand. For example, a specific restaurant's gift cards can only be redeemable for that specific store or other branches of the store.

Open looped gift cards: They are typically branded with a credit card network such as Visa. Such cards can be redeemed across multiple brands unless specifically restricted.

Why Points Based Rewards Work

An SHRM study has found out that employees become more engaged when they are rewarded with flexible rewards such as points. This can be attributed to the fact that points gamify the rewarding process. It means that employees can clearly see how their behaviors can earn them rewards, and they become more motivated to reach the next level.

Also, a central idea behind points-based rewards is to divert employees' attention away from cash-based incentives.

Yes, it may be nice to receive a lump sum of cash for reaching a goal. But sometimes cash alone isn’t enough to motivate people.

Cash awards tend to easily get lost in the shuffle. It may get spent on bills or routine expenditures, with no long-lasting association to the behavior for which employees got the reward.

But reward points allow employees to purchase something meaningful that they would not normally spend their money on. They can use points to get something immediately, or they can bank points to save up for a particular item. Thus, every time they get awarded, they’ll get the satisfaction of using points for something tangible.

The points based rewards system also empowers employees to choose rewards they're excited about. This influences positive behaviors among the workforce by creating a sense of anticipation.

7 Benefits Of Points Based Rewards System


When it comes to effective employee appreciation, point-based rewards are highly recommended for companies with a global workforce.

There are many advantages of including points based rewards in your rewards and recognition strategy. These include:

1. Higher Engagement

Since the reward points hold monetary value, employees feel great when they receive them. It gamifies the recognition process which keeps them engaged, happy, motivated, and productive.

Whether they are working against a deadline or toward a goal, recognition will offer employees a sense of accomplishment. They’ll try to find ways to earn and accumulate more points so that they can redeem higher value awards of their choice.

2. Easy To Recognize Global Workforce

Today, many companies have employees sitting in different corners of the world and coordinating together. It is nearly impossible to recognize such employees in an in-house recognition program.

A digital points-based reward solution makes it easier and faster to appreciate global employees working in different countries.

Recognize your global workforce with Vantage Rewards

Solutions like Vantage Rewards can adjust the rewards as per the standard of living of the country employees live in. It uses the SOLI (Standard of Living Index) framework to do this.

3. Flexible In Nature

Points based programs can adapt quickly to changing company needs, program objectives, and employee preferences.

Here’s how:

  • You can award different employee behaviors important to your company, like innovation, achieving targets, great customer service, commitment to work, and so on.
  • Also, employees have the freedom to decide how they would like to spend their points.
  • You need not limit your program to a “one size fits all” approach of simply giving gift cards. You can explore other options like offering redeemable merchandise or experiences.
  • If you’ve a global, diverse workforce, SOLI based rewards programs can help you adjust points against major currencies.

4. Easy To Understand By Employees

Another benefit of points based recognition programs is they are readily understood by employees.

Most people are already familiar with getting points from online shopping sites, credit cards, or stores. Thus, you won’t need to give a substantial amount of training to explain the concept to them.

5. Enables Frequent Recognition

A point-based reward system makes frequent employee recognition truly effortless. You can give rewards points to employees throughout the year for showing desired behaviors.

Also, points-based rewards help give timely recognition. It might not be fruitful to recognize an employee for something they did months ago. This is because recognition is most effective when it immediately follows the behavior you want to reinforce

6. Measure Impact And Track Metrics

Aside from motivating employees, most reward points systems help you track productivity and performance metrics. The data on the usage of points offers wonderful insight into employee engagement.

You can get insights into:

  • Who’s getting rewarded the most?
  • Who’s not giving or getting rewards points?
  • If the budget you’re spending is getting used efficiently and so on.

And take steps accordingly.

7. Points Add Value To Recognition

81% of people in Glassdoor's Employee Appreciation Survey say they’d be motivated to work harder if their boss showed appreciation. But adding monetary incentives to that appreciation helps recognition go the extra mile. Think of it as extrinsic motivation where employees focus on the reward that comes with completing a task.

Top 5 Tips For Setting Up A Points Based Rewards System


1. Set A Clear Goal And Roadmap

Points-based recognition programs can motivate employees to perform specific actions that align with the company mission. But for it to be successful, you need to be clear on some basic things like:

  • What’s the goal of your program? What do you want to achieve with it?
  • Who’s it that you want to motivate? Top-performers, fast learners, or high-potential employees?
  • And who can give out points? And how?

A guideline outlining the company values will help employees understand the company’s expectations for them to work towards it.

Be specific about the work process. Delegate the responsibilities of who will be in charge of coordinating and managing the data. Set the behaviors and values you want to recognize. Ensure they align with your organizational values.

Also, automating the process using digital recognition tools will help reduce the time spent on repetitive tasks and increase efficiency.

2. Make Rewards Meaningful

A reward point is only valuable if it can be used to get the employee something they really want.

So try to meet employees’ needs by ensuring they can redeem points for items that are meaningful to them. The reasoning here is that even the most choosy person should also be able to find something that excites them.

Provide them with many options like vouchers, merchandise, travel experiences, event tickets, etc.

Vantage Rewards come with a Global Catalog that provides a wide range of gift cards from top brands and retailers worldwide. It even comes with lifetime validity of points so that employees can accumulate points for a bigger reward later.

3. Make The Program User Friendly

One way to make the points program attractive to employees is to make it easy to use and access. Employees should be able to see their point balances, have a clear redemption process, and be able to get help when required.

User-friendliness will not only make the rewarding process more effective but also inspire employees to show desired behaviors at work.

4. Keep Scope For Flexibility In The Structure

Point-based reward programs are quite flexible. They can readily adjust to your company’s changing needs and objectives.

You can tweak any of the following according to your needs:

  • Program’s timeline
  • Target groups
  • Redemption modules and offers
  • Desired behaviors that will attract recognition
  • Roles and permissions
  • Budgetary allocations

5. Use Digital Rewards And Recognition Tools

It may be impossible for you to go up to each employee and reward them for their daily efforts. And with more people working remotely, companies are looking for ways to engage employees. They need digital tools that enable recognition in the flow of work.

In 2021, we conducted a study on R&R trends for remote working taking 248 responses from industry experts. 79% of respondents said they wanted an agile R&R platform for remote employees.

Digital R&R tools can play a crucial role in ensuring your points-based rewards system works seamlessly.

Here’s how:

  • Digital tools make the task of allocating points very easy. You don’t need to tally up points, shop for gifts, or spend hours distributing them.

  • When new employees join the company, they’ll receive access to the digital R&R platform. When they achieve certain goals, you can directly reward them with points.

  • The platform can provide each employee with an online wallet for their accumulated points.

  • You can also keep an eye on the usage of points, enhancing transparency. A digital recognition and rewards platform is a crucial tool for measuring your program’s progress. When you tie the reward points to a core value, you can track the number of times employees get recognized for that value.

  • You can also track the relationship between the amount you spend on rewards and key metrics like engagement, absenteeism, or productivity. This helps you see the impact of your program.

Delivering Impactful Points Based Rewards With Vantage Rewards


Digital R & R tool Vantage Rewards uses gamification techniques in the rewarding process to ensure your employees are always engaged.

Employees can easily redeem reward points as Gift Cards from our Global Catalog. This catalog includes a wide range of online stores and in-store channel partners, including groceries, entertainment, travel, apparel, and more. They can redeem points for merchandise items and booking adventure trips, events, and experiences. All redemption details are instantly sent to their registered emails after they redeem their points.

Employee preferences matter when you want to show authentic and impactful recognition. Each employee is unique. What might motivate one won’t necessarily motivate others. So it is necessary to take into account what they put value in.

With points-based rewards, Vantage Rewards give employees the choice to get the things they wish to buy. Thus, it becomes an ideal rewards platform for the modern, diverse workforce.

This article is written by Swati Baruah who is a part of the marketing team at Vantage Circle. Swati is a post-graduate in Labor Studies from Tata Institute of Social Sciences. Passionately interested in HR and people dynamics, she enjoys writing pieces that strike conversations. An avid reader and a frequent traveler, she loves exploring new perspectives. To get in touch, reach out to

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