Skill points as a reward...

[Olaf the Stout]

My players get 10 points to spend on background skills for their character. These are generally spent on things like various Knowledge skills, Profession:Farmer or Craft:Basketweaving, etc., I generally don't let them spend it on skills like Listen, Spot, etc., unless they can come up with some good explanation as to how it fits in with their background. I also ruled that no more than 3 points could be spent in one area (since they were effectively 0-level characters when they earned the skills).

The other thing I have thought about doing but have never actually tried is to give people bonus skills if they succeed in a skill check at a particularly crucial point in time. For example, picking a lock just it time to avoid some enemies that were about to attack the party or climbing a wall while being attacked and failing would have meant falling to your death.

I don't know how this would have worked since it would reward either pure luck (i.e. a high roll) or increase a skill in which someone already had a large bonus in (i.e. average roll but succeeded due to high ranks/modifiers).

Olaf the Stout

 

[Cadfan]

I regularly give out skill points as awards. I generally come up with some magical explanation for why. You know, you did a great service to the god so and so of the ocean, and now you have 5 free ranks in swim. Huzzah!

I also give out feats as awards.

The key with both of these, I think, is for the DM to decide what skills and feats to give out. If you let the players decide, they'll optimize their characters. If you decide as the DM, you can add flavor. And the players will be just as happy- they weren't expecting any free feats anyways, so when they receive Skill Focus: Handle Animal they won't complain.

A nice trick is to hand out feats and skills that run counter to the character's natural strengths. You know, give the evocation specializing sorceror that metamagic feat that lets your spells do subdual damage, because the church they assisted favors nonviolence, and they're hoping to convert him. He'll enjoy it, it will be flavorful, and he'll probably even use it once in a while. Give the fighter 10 ranks in spellcraft. Suddenly he recognizes incoming spells. He'll appreciate it. Give 5 ranks in ride to the wizard. Give the cleric 5 ranks in Perform: Dance, and 5 ranks in Balance. Saved a dwarf stronghold? Tatoos that grant the feat Toughness for all!

Basically, if they can (and will) get the ability on their own, let them. When you have control, give them the things they need for flavor, but that they won't buy with the limited resources they possess.

 

[ChimericDream]

I regularly give out skill points as awards. I generally come up with some magical explanation for why. You know, you did a great service to the god so and so of the ocean, and now you have 5 free ranks in swim. Huzzah!

I also give out feats as awards.

The key with both of these, I think, is for the DM to decide what skills and feats to give out. If you let the players decide, they'll optimize their characters. If you decide as the DM, you can add flavor. And the players will be just as happy- they weren't expecting any free feats anyways, so when they receive Skill Focus: Handle Animal they won't complain.

A nice trick is to hand out feats and skills that run counter to the character's natural strengths. You know, give the evocation specializing sorceror that metamagic feat that lets your spells do subdual damage, because the church they assisted favors nonviolence, and they're hoping to convert him. He'll enjoy it, it will be flavorful, and he'll probably even use it once in a while. Give the fighter 10 ranks in spellcraft. Suddenly he recognizes incoming spells. He'll appreciate it. Give 5 ranks in ride to the wizard. Give the cleric 5 ranks in Perform: Dance, and 5 ranks in Balance. Saved a dwarf stronghold? Tatoos that grant the feat Toughness for all!

Basically, if they can (and will) get the ability on their own, let them. When you have control, give them the things they need for flavor, but that they won't buy with the limited resources they possess.

I'm still new to GMing, and haven't played for all that long, but I'd have to agree here. I try to encourage my players to write up backstories for their characters, and I give them a bonus feat or skill points appropriate to the story. I haven't done this too much during a campaign, but my current game is coming to a head, and I may try this in the next campaign I run.