AWARDS are a GAMIFICATION element that symbolizes the achievements of learners.
Awards can be rewarded to learners to let them know that their success is noticed and appreciated, which in turn can often spur them on toward even greater achievements in learning. Awards can be used as an alternative, or as a supplement, to your traditional point-based grading system.
It is important to note that the reason Awards work are not because learners want these digital badges, but because acquiring these digital badges motivate students to further their learning. In other words, if you are applying gamification to your learning environment, use it with the theory that the purpose of Awards is to motivate learners, not to give them extrinsic rewards.
Awards can be digital badges, but they can also result in other class rewards, such as bonus time on an assignment, extra credit points, or even digital bubble wrap because who doesn't enjoy popping bubble wrap!