7 Ways To Use Reward Power

reward power

Reward power is the power employees have to supervise the work of others. Leaders with a thorough understanding of their team’s performance can incentivize their teams’ efforts. This article explores reward power, the why, benefits, and how its used to the organization’s advantage.


Reward power is given to a team leader to distribute monetary, non-monetary or psychological payments to employees in exchange for their work. It is called “position power” because a manager’s position within a corporate hierarchy determines how much power they have. 

Incentivizing an employee based on high performance is an example of reward power. Rewards are assigned solely based on the work and productivity of the employee. Consequently, making productivity and performance the base to measure success further minimizes partiality and resentment among employees.


Reward power is all about positive reinforcement and can help motivate employees on the job. The appeal of a prize – no matter how big or small– can promote team engagement and competition. It isn’t practical to offer rewards all of the time. However, rightly awarded rewards generate long-term positive cultural change within the organization.

Rewards can be tangible or intangible. Rewards such as increments, bonuses, equity, and certificates are examples of actual or extrinsic rewards. Whereas praise, good feedback, and a sense of contribution are intangible or intrinsic rewards. Intangible rewards are just as effective as tangible prizes while costing a fraction of the price.

Rewards encourage employees to repeat and achieve an equivalent outcome as performed earlier. As a result, the rewarded employee serves as a benchmark for performance. This further increases productivity and deepens internal relationships.



Reward power has proved to elevate employee happiness and contentment in the job. Implementing the compensation system relieves their fears of being undervalued and overlooked. Additionally, they feel financially secure when reward power is correctly implemented. Moreover, as the level of happiness among team members rises, so does their work output and job fulfillment. 


Job security and management are critical for enhancing organizational performance. Reward power results in employees enthusiastically participating in fulfilling the organization’s goals and objectives. Sense of job protection results in the organization’s functions running smoothly. As an outcome, the reward power gives employees a sense of security.


The proper implementation of reward power results in high employee retention. Employee retention is the ability of an organization to keep its employee from leaving. Therefore the use of reward power aids in lower employee turnover.
Incentives guarantee career development and advancement and are thus used to foster and develop a long-term relationship between the employer and the employee.


Reward power can improve employee happiness and contentment. Implementing the compensation system relieves their fears of being undervalued and overlooked. Employees also feel financially secure when reward power is applied.

Their level of happiness rises, as does their job satisfaction. Job pleasure, according to Gretchen Robin, “takes hold of the employee and provides them a sense of power and hold.” As a result, reward power delivers fulfillment and satisfaction to the organization’s employees.

Power used wisely can result in good results. How one allocates rewards correctly is essential.


Every individual is different; thus, their acceptance of rewards vary. Therefore it is crucial to offer incentives that appeal to the employee to encourage them to take the desired actions.
To recognize this, you can have meetings or run surveys to find what is considered of value to your team in terms of rewards. As a result of this exercise, it will reveal the needs of the employees, which is central for all successful businesses.


A team’s time, energy, and output are priceless. Therefore, investing in employees’ efforts is worth the time and money. Fairness in reward selection informs employees that you appreciate their time and recognize their effort or commitment.


Employees need to know what they accomplished to earn a reward. This systematic understanding of the workflow will ensure that the employees stay engaged. Ensure the team is aware of the criteria that could lead them to receive the rewards.

reward power


The organization faces significant internal competition among employees due to the provision of reward power. Increased competitiveness encourages organizations to formulate new ideas and actions. Employees work harder and contribute more to the organization with the right rewards.


Achieving goals and small milestones should reward employees for attaining important and smaller milestones. The acknowledgement will ensure that the organization appreciates the employee’s achievements and that their behaviour aligns with business standards.


Switching up the rewards occasionally makes it fun for the employees. Its generates curiosity around the reward system. By periodically changing the rewards, employees worked harder to obtain incentives. 


Individual-based incentives are unsuccessful when it comes to enhancing overall organizations’ performance. Hence companies’ strategies focus on team-based reward systems. Moreover, concentrating on the team rather than individuals substantially impacts employees.


Power in the corporate world can be formal or informal. French and Raven identified 4 other powers:

  1. Legitimate power is when subordinates deem the manager an authoritative figure with legal authority to make requests. 
  2. Expert power: is one’s idea that the leader having considerable knowledge/experience on the subject gives them power.
  3. Referent power: arises due to the leader’s status as a role model among their subordinates. 
  4. Coercive power is the threat of punishment or forceful performance by management to associates.


Firstly, a well-structured reward system uplifts workers to not only just align with the organization’s goals but also to work hard. Secondly and most importantly, the current attraction towards performance-based rewards is created to lead to more significant rewards and stimulation for those employees who contribute the most.
Nevertheless, developing such reward schemes is intricate, as they seek to control and change human behaviour.


Getting People Right (GPR) is an educational website providing professionals from all types of businesses with practical education in human resources and leadership. To keep evolving your leadership toolkit, additional GPR resources below will be useful:

Referent Power: The Secret To Getting People To Do What You Want

Coercive Power In The Workplace: Everything You Need To Know

7 Ways to Reward Your Stars

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