Small and medium enterprises are initiators of national economies around the world. They're most dynamic and important factor of development of modern society, main generator of economic development and initiator of improvement of living standard. In modern context of economy, it is necessary that small and medium enterprises operate as learning organisations, developing main resource in its property: human resources. Development and management of human potentials gets more important role within small and medium enterprises and becomes a focal theme in areas of its development. Apropriate policy of rewarding human resources, provides development of human resources with intention of constant improvement of employees and the organisation. Molding of reward policies and finding the right ratio between material and immaterial segment of the reward is one of the main tasks of all enterprises, including small and medium ones. On example of small and medium enterprise in Croatia was observed that enterprises understand the need of defining system of rewarding employees as an important factor of encouraging motivation, increasing productivity and succesful realisation of organisational goals.