(FORTUNE Magazine) – Imagine for a moment that your job worked like a game show. Maybe you'd have Pat Sajak for a boss. Or Alex Trebek. Now suppose the rules stated that every time you went above and beyond the call of duty, you could win a prize. Work over the weekend and take home a new five-iron. Make that impossible sales target, and, yes, you too could be basking in the tropical sun on a Caribbean beach. Think of it as Merv Griffin meets management.

That's exactly the idea that San Francisco-based Netcentives sold to Nortel, which now uses Netcentives' system for the majority of its 80,000 employees worldwide. Here's how it works: For a job well done, your boss rewards you with points (or a co-worker can nominate you). Trade those points for a cash bonus right now...or save them up and trade them for anything from a tool kit to a trip to the Super Bowl.

The whole thing sounds kind of corny, but there are advantages. First off, as Regis could tell you, the game show dynamic has always grabbed people's attention. Everybody wants to be a winner. Once they buy into the prize mentality, employees soon realize that taking the goodies has a major benefit over taking the cash--namely, no taxes. In most cases Nortel pays all the taxes for the employees. So instead of losing up to 39.6% of that hard-earned cash bonus, your $1,000 worth of points gets you a prize worth pretty much that. Which leads to another benefit. Cash can quickly disappear in a pile of car payments and Visa bills. But that brand-spanking-new DVD player will serve as a permanent, tangible reminder of your company's appreciation. And there are benefits for Nortel too. Since the entire program is online, it's faster and more efficient than older, offline alternatives.

Already 25,000 Nortel employees have received a points award, and 40% of those have redeemed them for prizes. After three years of exemplary work, one recipient, Kathy Gorley, an executive assistant, was able to remodel her bathroom--a prize she calls "a really nice pat on the back." Then there's Jessica Flynn, a Nortel senior financial analyst, who describes getting her all-expenses-paid trip to the Pro Bowl in Maui as "almost like Christmas." At just 26, Jessica believes that she's in for the long haul at Nortel. This year, Hawaii; next year, Door No. 2.

--Ahmad Diba