When it comes to designing effective reward programmes, one of the most deceptively powerful decisions you’ll make is how to value your points. It’s easy to assume the conversion rate is just a technicality — but in reality, it plays a critical role in shaping how participants perceive value, recognition, and motivation. At Incentivesmart, we’ve found that the sweet spot sits at 20 points to £1 (or £0.05 per point). This isn’t arbitrary — it’s backed by research into user perception, behavioural economics, and years of experience designing recognition programmes that truly engage people.
The Power of Perception
When people receive “money”, their brains immediately shift into rational evaluation mode. A £5 bonus feels small; a £50 reward is quickly spent and forgotten. But points tap into a more emotional, less transactional mindset. They feel earned, personal, and discretionary.
By using a points system, you separate rewards from the day-to-day concept of salary and expense. This helps reinforce appreciation and achievement, rather than payment. In psychology, this is called reward abstraction — the idea that symbolic rewards are more meaningful and memorable than their cash equivalents.
Making the Small Feel Significant
The 20:1 ratio allows for flexibility. You can give 10 points for a micro-behaviour like reading a news article or sharing company content. It’s a small gesture, but it feels tangible — “I’ve earned something.”
Similarly, recognitions for birthdays, peer-to-peer thank-yous, or exceptional effort can sit comfortably in the 100–1000 point range. These numbers feel substantial, even if the underlying cost is modest. They communicate appreciation without breaking the bank — and, crucially, they feel good to give and to receive.
The Wow Factor for Major Milestones
When celebrating bigger achievements — like long service awards, exceptional performance, or major business referrals — headline numbers matter. 10,000 points sounds like a real milestone, a badge of honour that people are proud to achieve.
It’s a perfect example of how thoughtful reward design turns recognition into aspiration.
Moving Beyond Money as a Motivator
Countless studies in motivation science (from Deci & Ryan’s Self-Determination Theory to Dan Ariely’s work on behavioural economics) have shown that money is not the ultimate motivator. Once basic financial needs are met, intrinsic motivators like purpose, mastery, and recognition drive engagement. Points amplify those intrinsic motivators — they represent recognition and belonging, not just payment.
The points-to-pounds ratio isn’t just an accounting formula. It’s a psychological tool that helps organisations recognise people in ways that feel meaningful, memorable, and motivating.
At 20 points to £1, you give yourself room to celebrate the small things, reward the big wins, and most importantly — make every point feel like a moment of appreciation.
