The 10 ingredients of a perfect reward letter

A reward letter informs employees about their salary increase or bonus. The content of the letter and the timing of its delivery have a significant impact on how the employee perceives the raise or bonus. Discover the 10 key elements of a strong reward letter and learn how to create an outstanding employee experience around rewards.

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February 26, 2025

A payslip is more than just a piece of paper with a number on it. It's an expression of appreciation for someone's work. A reward letter, the document containing information about a salary increase, promotion or bonus, is a crucial element of the employee experience. A good reward letter makes employees feel valued. Taking time to acknowledge raises and excellent performance boosts morale and motivation. Research shows that salary is the main reason why someone chooses to work for a company. Dissatisfaction with pay is the primary reason for leaving. As an employer, you'd better pay extra attention to everything related to compensation.

What is a reward letter?

Simple: it's a letter from the employer informing the employee about a salary increase, bonus, or promotion. The employee receives this letter after discussing these changes with their manager.

The reward letter is the official acknowledgment of the changes. It contains the exact figures and job titles discussed during the conversation. It provides confirmation and peace of mind. A reward letter is not an employee benefit statement. The latter, also known as the total reward statement, lists all employee benefits in one overview. A reward letter focuses on salary evolution.

What elements make up a strong reward letter?

What exactly goes into such a reward letter? While the content of the letter is clearly defined, that doesn't mean it's easy to write. It takes time to find the right words. It's crucial that the information is accurate and that the letter feels personal. Pay attention to these elements.

1. A reward letter is a personal letter. Start with a personal greeting. Express your appreciation for the collaboration in the introduction.
2. Choose a tone of voice that fits your company. Don't say 'Hi Pete' if you work in a company where hierarchy is important and business attire is the norm. But also don't say 'Dear Mrs. Coens' in a hip startup. It creates distance when you actually want to achieve a relaxed familiarity. For example, in a formal tone:

Dear Mrs. Deferme,

We would like to express our sincere gratitude for your continued dedication and commitment to our team. The Performance Review for 2025 has been completed. Your hard work and professionalism have made a significant contribution to our company's success. With this letter, we inform you that...

Or more informally:

Hi Peter,

Congratulations! You've done fantastic work at TechToday. We're happy to have you on our team and thank you for helping build our success every day. Your commitment and hard work have actively contributed to our company's success. We confirmed this again during the annual Performance Review. We're pleased to inform you that...

3. The first paragraph after the introduction contains the facts and figures. The reward letter describes the salary increase or bonus in detail, and also mentions any change in position. Include (a) the current salary, (b) the new salary, (c) the position change, and (d) the effective date of the change. For example (in the formal version, maintain the formal address):

Congratulations on your promotion to line manager!
Your salary will increase from xxx to xxx.
This represents an increase of xxx compared to your previous salary.
This change takes effect on xxx.

4. Explain why the salary increase was granted. Justify all changes, from indexation to performance. Check whether these matters are clearly stated in the letter.
• In Belgium, salaries are regularly indexed according to consumer price evolution. Include the indexation percentage and its effect on the salary in the reward letter.
• In a transparent and strategic compensation policy, a salary increase represents an evolution within a salary range or pay scale. Explain in the letter which salary scale an employee is in and how they progress.
• Is the employee entitled to a bonus? State the figure and why the bonus was awarded.

For example:

Due to indexation, your salary changes by 9 percent. Your salary increases from xx to xx.

The salary for your new position as service employee falls within salary scale 4. Your salary increases from xx to xx.

You are entitled to a bonus of xx. This bonus was awarded because you...

5. A strong reward letter includes the KPIs, the agreed objectives of the employee from the past year, and mentions whether they were achieved. There are 3 types of KPIs: individual goals, team goals, and organizational goals. In the reward letter, it sounds like this:

Congratulations on achieving your objectives this year!

Individual goals: Your customer satisfaction has increased by 15%, which has had a tremendous impact. We greatly appreciate your dedication to follow-ups and translating customer feedback into product improvements.

Team goals: Your team successfully launched the new website, which has brought in 10% more customers. The entire team has therefore excellently achieved its objectives.

Organizational goals: We have achieved our organizational goals. The company's revenue has increased by 30 percent.

We appreciate your hard work and dedication.

Our compensation software Youbo has built-in templates for the ideal reward letter. The correct figures and information are automatically filled in at the right place in the reward letter. This includes salary increases, indexation percentage, KPIs, salary scales, and so on. The built-in template can be perfectly adapted to your company's communication style, both in text and visuals.

Our experts translate your data and compensation principles, or your compensation policy, into the software. This way, each employee automatically receives the reward letter at the right time. No more hassle with time-consuming exports or error-prone spreadsheets.

6. Reward letters are often full of HR jargon. Don't forget that most employees don't use the same professional language. Write in human language. Make it understandable, clear, and unambiguous. Imagine the recipient of the letter sitting in front of you.
7. Accuracy is paramount: the reward letter must contain no errors. Neither in numbers nor in letters. Carelessness with numbers and dates is rightfully heavily penalized. Double-check the salary information. Nobody wants to accidentally receive too little pay due to a calculation error. Use spell check, or have the letter proofread by a copywriter. Language errors give the impression of rushed work, while you want to show that someone is important to you.
8. You want to emphasize that your employee makes a special contribution to the company. It's therefore illogical that reward letters are often generic. Working with a template doesn't mean the letters all have to be the same. Make sure the reward letter is unique for each employee. This can be done, for example, by adding an evaluation of objectives or a note from the manager.
9. Don't forget the thank you note and sign with your name, or that of the manager. It makes the letter more personal. Invite people to get in touch. This lowers the threshold.

For example, in a formal tone:

With this salary increase, we would like to thank you for the valuable work you deliver. Once again, thank you for your contribution and dedication.

Should you have any further questions about the content of this letter, please don't hesitate to contact us. We are here for you.

Kind regards,

Toon J. Meibergh
People director
+ 32 …
[email protected]

Or more informally:

With this salary increase, we want to thank you for the valuable work you do. Without you, we wouldn't have come this far. We look forward to the great things we'll continue to do together. Any questions? Feel free to reach out. Let's continue building our success together!

Best regards,

Toon J. Meibergh
People director
+32 …
[email protected]

10. The most common mistake with reward letters? Poor timing of delivery. Send at the right time. The letter should be sent after the conversation and before the new salary or bonus is paid. Because spreadsheets aren't transparent, it's unclear to HR where someone is in the reward process. Then mistakes happen. Sometimes the new salary is already deposited before the letter arrives. Or the employee receives the letter before the evaluation meeting. It gives them the feeling that they're just a number, part of a careless process. This contradicts the idea of appreciation for their work.

How does Youbo make the difference?

Our software is specially designed to make compensation processes more efficient and error-free. The reward letter is a crucial component in this. Youbo streamlines the process so that reward letters are sent on time, with the correct information automatically filled in.

Advantage 1: Transparency prevents reward letters from being sent too early or too late

With Youbo, HR can see exactly which evaluation meetings have been completed via a timeline. The system automatically sends reminders to monitor deadlines. This prevents letters from being sent too early (before the evaluation meeting) or too late (after the salary has already been deposited). Moreover, the software provides insight into which letters have been received, opened and read.

Advantage 2: Human resources and managers save a lot of time

Thanks to the built-in template, all data - such as names, figures and objectives - are automatically filled in. HR no longer needs to manually create or send letters. Once the process is complete, HR sends the reward letter with the push of a button. No more difficult mail merges or endless correction rounds. The letters are available in three languages (Dutch, French and English) and are automatically sent in the employee's language.

Advantage 3: Goodbye errors

All data is directly linked from the system to the right employee. Errors due to manual input are therefore a thing of the past. Reward letters are always sent to the right person, with the correct information in the right place. The sending is secure. The employee receives a link to the reward letter via email, which they can only open with a validation code received in a separate email. It's impossible to send a letter to the wrong person.

Advantage 4: A personal approach thanks to a personalized template

Personalize the template completely to your preferences. Upload your logo and colors and choose the elements that are relevant for your profiles. Automatically add the manager's personal message from the system, or the evaluation scores or achieved goals. This way, the message in each reward letter becomes unique.