Hello Meenu,
To motivate employees to be punctual and regular, such policies are tailored by several companies. For white collars, it's generally in form of appreciation notes or certificates. But for blue collars in the factory set-up, organizations have designed incentive programs whereby an monthly incentive of "x" amount is paid out to all those who have neither remained absent nor come late on any of the working days in the month. To further boost this, an additional quarterly incentive of "y" is paid out to all those who have been present (and punctual) for the 3 months in a particular quarter. For those with no absence (and punctual) for the entire first half of the year, a super-incentive of "z" can be paid out. How much you allocate for "x", "y" & "z" depends upon the extend of absenteeism (& late coming issue) in your company and your company's health and capacity to shell out these incentives.
Cheers, A.B.