My company uses this sort of point system. It is counted as income, but my company actually pays the taxes on it, which is nice. Whenever we get points, we also get a weird net $0-owed tax statement, which confused the heck out of me the first time I saw it.
My previous company (absorbed by my current company) didn’t have points, but they did occasionally hand out gift cards, and managers apparently had a stock of gift cards to give out as on-the-spot bonuses. These gift cards were also taxed as regular income, but in that company took the taxes owed out of your next paycheck.
I remember the first time I got a gift card from my manager as an attaboy, it was a pleasant little surprise that I appreciated. IIRC, it was for $50 (I can’t remember the merchant it was for, but it wasn’t a place that I otherwise would have shopped at). Then, on my next paycheck, the company deducted something like $20 for taxes owed on the gift card. That was an unpleasant surprise that I did not appreciate. I wound up net positive, but the company effectively redirected $20 of my money to this particular merchant, without my prior consent. I didn’t make a lot of money, so having $20 unexpectedly taken out of my paycheck was pretty significant, and it made that $50 gift card seem a lot less like a bonus and more like an obligation to do business with that merchant.