If we look back, we can see that workers have not always had the rights and benefits that today's workers enjoy. Since companies realized that people are the key to the success of an organization, the practice of rewarding employees is gaining more and more attention. What is more, companies are increasing the number of benefits in order to keep workers of quality, who represent greater advantage with their knowledge, abilities and skills in current conditions in contrast to other companies in their environment when it comes to competitiveness. Having that in mind, environment is a factor that determines certain aspects when it comes to a company's business. It can also influence some indicators when it comes to employees. Motivation and the act of rewarding employees are intertwined; influencing one another and depending on each other. If a company has a fair system for rewarding its employees, motivation of employees will be on a high level, which leads to equally high productivity and success of the whole company. Using secondary data and professional literature as the basis, theories of motivation and systems of material and non-material rewards which are the most popular and the most often used in practice are covered in this work. Also, using practical examples of two companies which operate in Croatia, material and non-material types of compensation that are used are shown, as well as the fact how they influence employees and their overall motivation in the end.