Pros and Cons of the Employee of the Month

We’ve all seen the boards at retail stores featuring the smiling face of the employee of the month. But do these actually work to motivate and engage employees?

In a previous post, I spoke about employee recognition and appreciation, including some statistics and principles to keep in mind. Following that post I had a question from someone, asking are employee of the month programs still relevant? Or are they dead? Before I answer that question, let’s look at the pros and cons of the good old employee of the month program.

Are employee of the month programs still relevant? Or are they dead?’

The Pros

Why do we still have an employee of the month programs? If you’ve ever worked in a retail store, perhaps when you were a teenager or going through university, you might remember someone’s face going up on the board each month. They’re also used in lots of office environments as well.

These programs have been going for decades and they’re still going strong today. Why?

  • Easy to implement They’re really simple, right? We don’t need to worry too much about having a complicated recognition program, we just need to make sure that every month, we have somebody nominated for employee of the month.
  • Offers social proof They also provide social proof. If our peers vote for the employee of the month, it makes people feel good. They think, ‘my peers think I’m good at my job’.
  • Provides public recognition For people who enjoy public recognition, employee of the month can be really motivating. And for workplaces that attract extroverts, such as retail environments, many people enjoy public recognition.
  • Highlights best practice They’re a chance to spotlight great work and that could lead to other employees picking up new behaviours. It’s not just saying, ‘this person has excelled’, but also ‘these are the reasons why they’ve been recognised’. It makes people think, ‘are there ways that I could also do that?’
  • Demonstrates company values These programs also demonstrate what the company values and rewards. You’re doing this monthly, and you’re doing it really publicly. So the company’s expectations of its employees become clear quite quickly.

‘These programs also demonstrate what the company values and rewards’

The Cons

So what are the downsides of employee of the month programs?

  • Can create disagreement One issue is that not everyone’s going to agree with the choice of employee. Let’s say that Isaac gets rewarded, but Tori says, ‘hang on, I’ve been struggling to even get him to answer an email from me’. That can be really demotivating for some people.
  • Highlights perceived favouritism For example, if I think that Tori is favoured by management, and then she keeps receiving employee for the month, it reinforces my sense that the workplace is unfair.
  • Can create round-robins In small companies, you might find yourself regularly rotating through all your employees. It’s like when kids in school become ‘star of the week’, and the teacher makes sure that no one misses out. The program becomes meaningless.
  • Rewards performance not values and behaviours You need to be clear on your criteria for awarding the employee of the month. Make sure that it isn’t just performance, but also includes values and behaviours. If you just highlight performance, rather than how things are done, the subtext is that it doesn’t actually matter how you get the results, as long as you get them. And that can be really damaging for your culture.

the subtext is that it doesn’t actually matter how you get the results, as long as you get them’

The Importance of Recognition

Recognition in the workplace is incredibly important. One study published by Forbes found that two thirds of employees would quit if they didn’t feel appreciated, and that actually jumps to 76% for millennials. So, knowing we need to recognise employees, let’s go back to the question we started with: is the employee of the month program dead?

Personally, I feel that the cons outweigh the pros. Here are my tips for creating a more effective appreciation program.

Meaningful Appreciation

As I detailed in my previous post, there’s a lot of research behind recognition that shows it’s best when it’s personal, differentiated, specific and timely. So you need to have different recognition for different employees and different achievements. And when you go back to that research, employee of the month programs really don’t hit all those things.

Appreciating Introverts

Another downside is that if you have people that don’t enjoy public recognition, and there are a lot of people who don’t, employee of the month programs may actually be demotivating. The employee of the month really only appeals to a certain section of your employee base, which means you don’t have something that attracts and motivates all of your employees.

So if you do go ahead with employee of the month, you need to ensure the people who don’t enjoy receiving public recognition are recognised in a quieter way.

Record Keeping

If you’re still going to implement one of these programs, keep records of who is being recognised for what, how often, and why they’re being awarded. Try to mitigate against the same person repeatedly becoming employee of the month, and notice if you are only recognising employees based on their performance. Try to ensure that you are recognising behaviours and values as well.

Peer Recognition

Consider software that enables employees to give each other points. These use a similar system, but spread across many employees. So rather than me just nominating one team member as employee of the month, maybe I’ll get 20 points a month, and I can spread those 20 points across four or five different people.

This can be a way to mitigate some of the cons, because you don’t just have one employee of the month, but employees still get social proof and recognition from their peers, just in a different way.

Financial Incentives

The next question, of course, is with the employee of the month, is recognition enough? Or is it better to include a financial incentive? Researchers in Michigan looked into this question with two experiments. In one experiment, they assessed the impact of receiving employee of the month — in this case it was called a ‘check processor of the week’. In the second experiment, they included a monetary bonus.

They found that there was an increase in performance after receiving the first award. But the performance gains did not sustain over the experiment. In fact, they found that there was a slight decrease in performance after people had received the monetary reward.

The researchers put forward a number of possibilities to explain this, including the revolving nature of the award (since the award went from one person to the next); being nominated as a person of the month wasn’t desirable; the award wasn’t valuable; and the criteria on how it was awarded wasn’t clear.

And the other thing was the whole winner-take-all format, people were only able to win employee of the month, rather than having a chance to be recognised in other ways as well. Of course this is just one study, but my experience working in organisations, and other research, reflects this too.

The Takeaway

Overall, I do think employee of the month program are dead. But there are other things that you can do to recognise employees. If you want to continue with a simple process, look into what little tweaks you can make, so that you can ensure the recognition is really personal, differentiated, specific and timely.

Have your say

Does your organisation have an employee of the month program? We’d love your feedback on this series, just head on over to Amplify HR or connect with Karen on LinkedIn.

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Karen Kirton

Founder of Amplify HR — a consulting company in Australia that specialises in enabling businesses to find, grow and keep great people. www.amplifyhr.com.au