There are usually desired outcomes that you are trying to arrive at when giving an award, whether it is individual motivation or improving team morale. Although you are always rewarding someone for a job well done, you are also steering the rewards culture into positive territory. Each reward for a past accomplishment sets the stage for improved staff retention and better, more predictable results on future projects.
Make sure you are consistent and unbiased to achieve the best ongoing results. Try to establish an environment of excellence by publicizing great work. The employee of the month awards don't just work for your local fast food joint. Put in place a periodic award with a certain dollar range and personalize it for each award winner. Present the award with a certificate that can be displayed in the winner's work area. For this to be effective it must be well-deserved, so don't be afraid to skip a period if no one clearly exceeds expectations.
Team rewards can also result in building team unity. If you feel your team needs a boost, take them for team outing. Make sure it is an event that they can all participate in and interact, such as bowling, miniature golf or paint-gun battles. Going to a ball game or out to dinner doesn't always end up with the desired team interaction.
I did end up fessing up at that lunch and have since started to address our negative rewards culture. I learned that a reward that works for one group or person may not work for another. Evaluate your team's needs, listen to their wants, and then build a rewards plan that complements their compensation and the company's reward culture.