In the work, we use reward and punishment in this world. In the next world, we do not use it although it exists. However, the general public uses reward and punishment primarily in the next world, and not reward and punishment in this world.
“Reward” means pleasure, and “punishment” means suffering. For the general public, who work for their own sake, they use reward and punishment of the next world because only in the next world will they feel the pleasure of observing Torah and Mitzvot [commandments], and the suffering for not observing Torah and Mitzvot. In this world, they do not feel pleasures or suffering from observing Torah and Mitzvot or vice-versa. Therefore, they must use only with regard to the next world.
But those who work in the individual manner feel a punishment if they have no faith in the Creator, meaning they suffer because they have no faith. Also, they derive pleasure, meaning reward, from being able to believe that the Creator leads the world in a manner of good and doing good, which is called “reward and punishment in this world.”