From Social Patterns
A person participating in a social structure expects to develop a reputation and hopes for insight into the reputations of others, but each designed model of participation and reputation embodies its own set of biases and incentive structures. Balancing these forces determines in large measure the success or failure of a social system.
The designer needs to match the reputation system to the community's degree of competitiveness.
Participants in a community need some way to gauge their own personal development within that community.
Participants in a community need some way to gauge how far they've progressed within that community.
Community members need to identify distinguished members of the community.
Some participants in communities respond to opportunities to collect and display awards.
In highly competitive communities, users may want to compare their performance against that of their peers.
In some communities, participants want a tangible measurement of their accomplishments.
In highly competitive communities, users may want to know who are the very best performers in a category or overall.
Participants in some communities welcome the challenge of striving to enter the top tier of competitors.
If implementing any kind of reputation or points system make sure you fully, clearly and openly communicate any changes you make to that system after it has been created. Users will react very negatively if changes to a reputation based system are not clearly communicated to them.
You have been warned.