Anyone who has GMed for any amount of time has probably come across this problem. You've set up the world, set up the game, the players have their characters, and you are coming around to the first session. Being the great GM that you are, you are looking over character sheets and histories looking for hooks to link your story to the character's back story or otherwise get them involved. You look at the first player, solid sheet, solid back story if a bit dry. Tells the tale in two paragraphs, and while a bit over-summarized you at least know where they come from. The second player is the same thing, perhaps some NPC names are dropped here and there. The third player is a bit better, a couple hooks, a mysterious teacher that sort of thing. Then you get to the fourth person's story. They have pictures - hand drawn ones too - their back story is two pages and they've clearly spent a lot of time thinking on it. There are hooks and plot lines you can take or leave all over the place. The person has clearly made a major investment into the character. Whats better, as time goes on the investment continues. The player writes an in character journal, chronicling the trip and their feelings on things. They make pictures for the other PCs and important NPCs. They've invested in the game. So how do you reward them, and should you even do so?
Now, obviously my answer to that question is yes. Yes you should reward them. I say this unabashedly. I say this knowing it is partially self serving (while I don't do art, I tend to do a lot of work for my characters) because two of the three GMs that I regularly play under read this blog. I'm also saying it as a GM with several of their players who also read this blog, players who have in some cases expressed a need for just a touch more XP here and there. So, why am I so for this? Well, lets look into what is actually going on.
Types of Investment
Generally speaking there are three types of investment. Art, writing, and OOC tracking. Art is easy, it means that the person is finding, or making, art for their character or other characters in the game. They are bringing in visual references for the game, things that can be used to convey an accurate appearance much faster as they simply go "this here is what I look like" instead of the usual "about 5'6, shoulder length blonde hair, grey eyes" that usually happens. Next is writing, the person is writing extra to give a sense of their character. A journal with the character's thoughts, letters home, fluff detailing what they do in the time between sessions. They're further defining their character, and the world around their character, and making both that much more real. Finally, OOC tracking is the player keeping track of events for the group and the GM. Taking some of the load off of others and onto themselves for the good of the game. It is, perhaps, the easiest of investments, but it is still investment.
In any of the three cases though the player is adding to the game. Bringing something that wasn't there before into it, and adding to the depth of the game, giving another view of events. It takes time, and it takes work, but they're doing it. It at the least deserves a kudos.
Types of Reward
The most common type of reward I've seen GMs go for when confronted with this sort of thing is XP. It's not a bad reward, in fact it is even a good one as it is a gift that will give forever to the character. It is, however, not the only reward that can be given out. For smaller things, you can also give out things such as Hero Points (or Action Points, or whatever your game calls them if you have them) as a reward. I'm also a big fan of giving out pushes. A push is something that nudges a dice roll by 1 point up or down (depending on what the player wants), they can spend as many as they want on a roll (some GMs limit this to 1 per roll) and it gives them a way to make an important failed roll into a success at a crucial moment. A good reward no matter what you are doing.
Why You Should Reward
So, here's the actual meat of this post. You should reward because, I assume, you want to encourage the person to keep doing that work. They are making the effort, and adding to your game, and they should get something for it, even if it is small. The player is going above and beyond the expected, above and beyond what the others are doing, and trying to bring something truly special to the game. Who do you think is going to care more about their character? Joe, who plays a good game and is always fun to have at the table? Or Bob, who plays a good game, is fun to have at the table, and has currently written 10 pages of journal entry for you where they explore their characters thoughts about what is going on? I'm not saying Joe hasn't developed his character to the same degree, but Bob is sharing it, and adding to the world with what he is doing.
As a GM your job is to present the world, present the story, present the antagonists, and get your pcs to change, grow, and adapt. The player who is investing extra time and effort into their character is only making your job easier. They're taking a load off of your shoulders, as now you have visual references to check with when describing things. Now you have feedback on what is and isn't working at effecting their character. Now you don't have to spend as much time checking against what has happened, because someone is keeping track of it for you. So why not give them something, and encourage them to keep doing so?
Another way to look at it is this. Most games have some XP reward for showing up to the session, or base XP per time at the session. 1 XP per hour, or per session with other stuff is really not rare anymore. This means though, that the system has a rating in it for time of playing. A 4 hour session is worth 1 XP. So 4 hours of playing is worth 1 XP. If everyone is putting in 4 hours a week into their character, but Bob and Sally are putting in 8, shouldn't they get the other XP? This isn't a view I necessarily agree with, but I've heard it said before so I figured I'd share it. When used, it did get the point across to the GM who was doing XP/hour played instead of monsters killed and other things.
Why You Shouldn't
I believe you should reward, but there are some reasons you may want to shy from rewarding too much, or too often. The more common ones I've seen are below, and I'll also address them a little bit.
Furthers the Power Gap
This is true, and a valid concern. If someone is earning an extra XP every session due to their character journal or pictures they are making, they are going to end up with a stronger character. They simply have more XP which lets them buy more things. I don't actually see much problem in this if you reward right, as while they'll have a bit more it shouldn't be a staggering amount. I also don't have an issue with PCs at different XP levels though, because if you are doing your job right you can still challenge them on things. Also, the only reason for the power gap is the difference in what people are putting into their characters. Everyone can get the bonus XP by putting in more work, which would then stop the power gap from widening. Still though, for some games this could be a problem and a reason why you may want to consider alternative rewards to XP for things. Especially since some players just have more time than others when it comes to adding to their character.
Hard to Balance
By balance here I don't mean the power gap, see above for that. I'm talking about how much reward is given to what work. If Bob is handing in character portraits, and Sally is writing a character journal, how do you reward them both evenly? If you don't (lets say you think Sally is putting in more work so give her a better reward) you run the risk of looking like you're playing favorites. There also comes the issue of judging what is being done. I can't draw for crap, but some of my friends can. So if I try to draw a character portrait, it is going to come out looking a lot worse than theirs. I'm still trying though, but it is easy to see a GM having a hard time giving my sloppy drawing (no matter how hard I tried) the same reward as someone else's near professional quality work.
Late to the Party
So, lets say you do reward the investment. Someone else picks up on it and now half your play group is doing additional stuff for the game. Then the others slowly join in. When the last person joins in, you're now in an interesting position. See, no one is putting in 'extra effort' anymore because everyone is doing the same thing, but that last person was promised that his effort would be rewarded as well. Frankly, this is a non issue for me, as I'm not really rewarding for extra effort so much as I am for making my job easier and bringing more info to the table. So I'd say to just keep on keeping on, but the more everyone is doing something the less special it will seem. So those late to the party will end up in a situation where they feel they are getting diminished returns.
How To Reward
Ok, this post is getting a lot longer than I originally intended so I'll end it with this. How you reward people in your game for investing is up to you, but there are some things you want to consider. I'll order them for you below.
1) Tell everyone at the game you are doing it. A simple "Just so people know, if you give art or put in extra work to your character I'll give you in game rewards. Talk to me after if you want to know more about it." will suffice, but you can also do it by just pointing out that "Sally gave me an awesome journal write up for the last couple sessions, so I'm going to give her a couple extra XP/Hero Points/whatever. Just so people know if they're looking for some extra stuff in game" once someone has started doing their investment. The point though is to make sure everyone knows it is possible.
2) Pace your rewards. If someone is giving you a piece of art a week for something, then give them something for it each week but don't think it has to be huge. A push or two works for the most part, giving the player a continued edge, but not drowning them in XP or other things that can break the flow of your game. The idea here is to reward and encourage, not to elevate someone to a position as a god PC. Heck, often times thanking them and just going "Hey, you know that thing you've been saving XP for? How much XP do you have? How much does it cost? yeah, just ignore the difference and go" on occasion will work wonders. Basically, don't think you have to give out 300xp everytime someone turns in something. Be creative, but be appreciative.
3) Be fair. If other people start doing stuff as well, give them the rewards as well. They're still making your job easier after all, and the game has just become that much more involved for everyone. This is also where pacing your rewards is good, and you'll be really happy if you primarily only reward with like 1/2 an XP or a couple pushes once everyone is doing it. That way you don't have to go back and completely remake all your villains to still be a challenge to the new god-mode PCs.
As usual, I think rewarding game investment is a good thing, just be careful to do it right and hit the right stride with your group. Encourage people to put more into their characters and the game. Everyone benefits off of every little bit thrown into the game, if only because it makes things that much better, or three dimensional for those involved. It may be the case where rewarding isn't for your game, and that is fine (just be upfront about it. "I still appreciate this stuff, but for this game I won't be giving out tangible rewards"). You can also reward non-mechanically with story bits for the person (shoulda mentioned it above, but didn't. oops).
Bottom line? Have fun with it, and make sure your players are having fun with it.