Two aspects to reward systems

"There are two aspects to rewards systems, both equally important. Many designers fail to realize this, and so design rewards systems that are internally conflicted--they encourage opposing play priorities. . . ." (from M. Joseph Young's "Applied Theory")

The first side of a reward system is answered by the question: "What does this reward, that is, what does a player have to do to receive the reward?"

The second side is answered by the question: "What kind of play does this reward facilitate."

If the actions rewarded and the actions facilitated by the rewards do not line up, then you have an incoherent reward system that muddles play. Young gives a great example of how these two halves of the equation can go wrong:

"There is a clear example of this found in examining the popular experience points systems of games in which you kill monsters and get treasure, which gives you points, which raises your character level or skills, which makes you better able to kill monsters and get treasure. This is a coherent gamist rewards system: everything in it is geared to encourage the process of killing monsters and getting treasure, that is, overcoming the challenges of the game. It is a system that does not need repair, because it works extremely well at doing what it is supposed to do.

However, there are many referees who don't like what it does. They think it encourages players to focus on killing monsters and getting treasure (which is correct, because that's exactly what it's supposed to do). They don't want that to be the focus of the game; they want to encourage role playing, or character development, or dialogue, or helping people, or any of uncounted other roleplay preferences. So they strip away at least some of the points gained for killing monsters and getting treasure, and instead give them for performing the desired conduct, whatever it is. Now a player character gains experience points by helping the poor, or pursuing his private hobbies; these points increase his level--which makes him better at killing monsters and getting treasure. The rewards are now given for one sort of play, but they still facilitate the other."