It is class of rewards which cannot be seen or touched but which can considerably improve the performance of an employee by improving their motivation levels.These rewards are aimed at the need of the people to be appreciated and cared for. Some examples for intangible rewards can be a thank you letter, an appreciation note, open appreciation in a meeting, a special lunch, encouragement to pursue own ideas, transferring to a place of choice etc.
The benefit of using intangible rewards is that they can help in the long run by increasing motivation levels of employees. Also, the organizations do not incur very high costs on these rewards. The other advantage over the tangible rewards is that, even though these awards are discontinued, they do not lead to a dip in performance.