What kind of material is good for my dog's outside bathroom area?

We just moved into a house and I have a 3 yr. old Boxer. We have a small fenced in area for him, but it is just dirt. The dog is very hesitant to go out there and we want him to be more comfortable. I need to find a material that will not get too muddy in the rain or snow, provides some drainage, and that will not bother his paws. We've thought about hay, small pebbles, ect...but are not sure what would be the best thing. Any suggestions? We want to get it right the first time...Thanks!