A supplier is rewarded based on three performance metrics : Quality, Cost and delivery.

This reward
effects on corporates relationship of buyer and suppliers. Nowadays, many well-known companies have
implemented new or significantly enhanced supplier recognition programs. This awards helps to
motivates the suppliers to perform better . As a consequence, more firms began to realize that “awards
based on relationship management outcomes in terms of improved business performance are the way to
forward.”
Supplier awards only played a minor role and only served as a mediating variable in their model. It
remains unclear under which conditions supplier awards stimulate motivation.
Furthermore, most of research has been conducted about awards effects on an individual
employee level, whereas collectivism for corporate awards has not been taken into account.

Type of Awards: Discretionary and Confirmatory Awards

In order to discuss awards in their full existence, a distinction between the two basic types of
awards needs to be made.
Discretionary awards are given ex post for outstanding behavior and often come as a surprise.
In contrast to confirmatory awards, they allow to recognize effort and performance more
broadly, without the need to exactly quantify the underlying activities.