Why Employee of the Month Programs Usually Don’t Work

Compensation pros – when you think of base pay in today’s organization, do you think in terms of guaranteed annual increases or in some form of pay for performance?

Most realize the former is the method a century old, while pay for performance in some guise is the far more modern approach. Yet, these same compensation and benefits pros often continue to cling to century-old approaches to employee recognition and reward.

Employee of the Month and similar limited winner, “popularity contest” methods for employee recognition should be long buried. The Monster Thinking Blog outlined reasons why in a recent post:

“Years of research unequivocally supports the conclusion that traditional employee motivation programs actually decrease the overall morale and productivity of a workforce. Unfortunately, many well-intentioned human resource professionals continue to spend their resources attempting to create motivational programs that, while they make sense intuitively, do far more harm than good.

“When I refer to traditional reward-and-recognition programs, I mean … ‘dangling carrot programs.’ … Among all programs, “Employee of the Month” stands out as the most counterproductive.”

These programs demotivate

I’ve commented before that employee of the month programs often devolve in one of two ways – either turning into a competition instead of praise and acknowledgment or becoming a “who’s turn is it this month?” exercise.

Let me be crystal clear – these programs largely demotivate. They do not engage, encourage, motivate or appropriately recognize employees. As the Monster Thinking blog post points out:

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“By the way, it becomes progressively more difficult over time to get employees who lose motivated again. Do you really want to have to worry about dangling carrots every day and every time you want your employees’ best effort?”

Any kind of recognition program that intentionally creates “losers” is doomed to failure. What should you do instead? Recognize and show your appreciation for employees – all employees – who demonstrate your core values in contribution to achieving your strategic objectives. This eliminates both the competition and “it’s your turn” of failed programs like Employee of the Month that have seen their time pass long ago.

Have you ever been named “Employee of the Month?” Was it an honor, a popularity contest, or “your turn?”

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their company culture. As the Vice President of Client Strategy and Consulting at Globoforce, Derek helps clients — including some of world’s most admired companies such as Proctor and Gamble, Intuit, KPMG, and Thomson Reuters — leverage recognition strategies and best practices to better manage company culture, elevate employee engagement, increase retention, and improve the bottom line. He's also a renowned speaker and co-author of Winning with a Culture of Recognition. Contact him at irvine@globoforce.com.


2 Comments on “Why Employee of the Month Programs Usually Don’t Work

  1. You are right on target. I might add that misguided incentives like Employee of the Month contests often serve as examples of the Law of Unintended Consequences. Here are two:

    1. I once worked for a company that made a big deal about naming Employees of the Quarter. Not long after an awards ceremony, I was doing a routine payroll audit when I caught one of the winners forging her time card. Over a two month period, she had clocked 40 hours when she wasn’t actually at work. In most cases, this would be a serious offense. However, I learned that day that the Employee of the Quarter comes with a “get out of jail free” card because a severe warning or a termination would embarrass the management team.

    2. My local coffee house had an employee of the month program and posted the winner on the wall. One day, I noticed they were about four months behind. Seems that nobody was motivated by this, including the manager. Now the display just made them look bad.

  2. Surprisingly perhaps most organizations do an abysmal job or recognizing and rewarding performance.  That is especially true for not-for-profits of all types.

    Only one employee stands out!  Wow!  Everyone else is by definition an inferior employee.

    Someone told me years ago that a major company planned its recognition program for sales personnel to make virtually everyone feel like a winner.  That makes far more sense.

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