Visual working memory possesses strict capacity constraints which place limits on the availability of resources for encoding and maintaining information. Studies have shown that prospective rewards improve performance on visual working memory tasks, but it remains unclear whether rewards increase total resource availability or rather influence the allocation of resources without affecting availability. Participants performed a continuous report visual working memory task with oriented grating stimuli. On each trial, participants were presented with a priority cue, which signaled the item most likely to be probed, and a reward cue, which signaled the magnitude of a performance-contingent reward. We showed that rewards decreased recall error for cued items and increased recall error for non-cued items. We further demonstrated that rewards produced a tradeoff in the probability of successfully encoding a cued versus a non-cued item rather than a tradeoff in recall precision or the probability of binding errors. Lastly, we showed that rewards only affected resource allocation when participants were given the opportunity to engage proactive control prior to encoding. These findings indicate that rewards influence the flexible allocation of resources during selection and encoding in visual working memory, but do not augment total capacity.