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 senior vice president of client strategy and consulting at Workhuman, where he leads the company’s consulting and analytics divisions. His writing is regularly featured across major HR publications, including HR Magazine, Human Resource Executive, HR Zone, and Workspan.