When combined, 奖励 (jiǎnglì) literally means “to award encouragement.” It's not just about the prize; it's about using a prize to motivate future positive behavior.
In Chinese culture, `奖励` is a powerful and visible tool for reinforcing social and organizational values. It's deeply tied to the concepts of education, collective progress, and face (`面子 mianzi`). Unlike the often purely transactional nature of an “incentive” in the West, a `奖励` in China carries significant social weight. When a student receives an award (`奖状` jiǎngzhuàng), it's not just a personal achievement; it brings honor to their family. When an employee receives a bonus (`奖金` jiǎngjīn`), it is often a public acknowledgment of their contribution to the team's success. This public nature serves to show everyone what behaviors and outcomes are valued by the collective (the school, the company, the nation). It's a method of teaching by example, reinforcing a clear hierarchy where positive contributions are formally recognized by those in authority.
`奖励` is a common and important term used across various domains of modern Chinese life.
The term is generally semi-formal to formal. You wouldn't use it for a casual favor between friends, but it's perfectly appropriate in any situation involving a structured system of recognition.