Rewarding employees is an important factor for the business of any company. Through the reward system in the company, managers and employers show employees that their efforts and the results they achieve are being noticed, and employees receive tangible or intangible confirmation that they are doing their job well. Every company should develop its own reward system and adapt it to the employees working in the company so that the reward system is effective and motivates the employees and contributes to the quality of the employees' work. Through compensations, i.e. rewards that managers give to subordinates, they want to achieve an increase in the level of motivation of employees so that they contribute to the company's operations with their work. Given that people of different ages work in companies, managers should pay attention to how the reward will impact the employees, and one of the generations that is currently on the labor market, employed in companies around the world, and reward systems should apply to it is generation Z. The aim of this paper is to investigate which material and non-material compensations have a successful effect on employees who belong to generation Z. The aim of the theoretical part of the paper is to describe generation Z, to point out the importance of the reward system and to indicate the ways in which managers reward employees, and the aim of the practical part of the work is through primary research find out whether material or non-material compensations have more affect on generation Z.