Always make clear who you are rewarding, how, and why. How? By defining expectations and tying concrete rewards directly to the fulfillment of those expectations.
Imagine if you could stop paying people and start buying their results, one by one. What do you think would happen if every manager had the discretion, the ability, the skill, and the gumption to start negotiating with employees as if they were outside vendors? What if you could tie every reward and detriment solely to measurable instances of employee performance?
Give every person the chance to meet the basic expectations of his or her job and then the chance to go above and beyond—and to be rewarded accordingly. Create trust and confidence through open communication and transparency, so every employee knows exactly what he or she has to do to earn rewards. Monitor, measure, and document it every step of the way.
Ideally, you want to reward people when they deliver results—no sooner, no later. Immediate rewards are most effective because there can be no doubt about the reason for the rewards, providing a greater sense of control, a higher level of reinforcement, and a continuation of the momentum generated by success.