Is an “Employee of the Month” scheme beneficial?

It is well known that recognition in the workplace is important for a number of key reasons: increasing employee morale, encouraging employee engagement and motivating performance to name just a few. However, it’s also important that we take a good look at HOW we recognise and reward our employees as one type of recognition scheme may not suit all business environments.

Often seen as a “safe bet” and easy-to-implement solution, the traditional “Employee of the Month” scheme has been around for years, with each month’s star employee often being presented with a certificate or award and perhaps a bottle of fizz to celebrate with later. This concept has become so widespread that 80% of companies are reported to have some sort of work-related reward such as “Employee of the Month” or “Top Salesperson”¹. However, although this type of employee appreciation program may work for some businesses, particularly those with a very small headcount, it tends to fall short with most organisations and can even have a negative impact on the workplace.

 

Motivate the few, demotivate the many

With only twelve months per calendar year, this type of scheme is already limiting as it only allows you to recognise a set number of people each year – depending on the size of your organisation, this could constitute a very small proportion of your employees. As a result, instead of motivating your entire workforce, this way of working is likely to just motivate a small number of people. At the same time, recognising just one person per month is likely to demotivate other employees as other good performers feel that they have been overlooked when they are deserving of some recognition and as a result, they may feel that continued effort is not worth it.

 

Creating a negative working environment

Due to the nature of “Employee of the Month” schemes, a sense of competition is inevitable amongst employees. Whilst this can be healthy and encourage people to perform better, it can also have an unhealthy side which could negatively impact your company culture. If you believe you’re being overlooked at work despite your best efforts, you’re more likely to develop a sense of resentment towards your colleagues who are being rewarded. Furthermore, key company achievements may have a whole team of people behind them, making it unfair to just reward one person, rather than a whole team. This can have an impact on how people work together as personal achievement is perceived to be valued more than team achievements.

 

Unclear expectations of performance

Finally, awards such as “Employee of the Month” often do not have any set criteria as to what is required to achieve this coveted title. Instead, the winner will be determined based on the subjective opinions of company managers regarding who they feel has performed well that month. By not setting clear expectations for employees as to what they need to do to win this award, employees can become demotivated as attempts to perform well go unrewarded. This lack of clarity is often further complicated by the managers’ wish to make sure they’re being inclusive of all employees. Deserving winners may be overlooked one month because they had already won not long ago or an individual may win one month over someone more deserving simply in an effort to ensure that rewards are fairly distributed. With so many subjective opinions and different considerations being taken into account, it is very difficult for employees to know what to aim for on a month-by-month basis.

 

A better solution

It is clear that there are a number of factors that need to be considered when setting up a recognition scheme within your company to ensure that it has the desired effect and doesn’t inadvertently end up causing more harm than good. It should be noted that “Employee of the Month” schemes may not always be necessarily a bad move but it is important to combine these with other forms of recognition to prevent any negative effects. So what does a good recognition and rewards scheme look like?

 

Instead of a routine and impersonal scheme such as “Employee of the Month”, why not put your efforts into creating a company culture of day-to-day employee appreciation and positive reinforcement? Instead of placing limits on who can be recognised, when this can occur and how many people are rewarded within a certain time frame, managers should be encouraged to recognise all good performance by employees as it happens. If it is a team effort, recognise the whole team who put in the effort to achieve something, not just one person. This gives everyone a fair chance of earning recognition and employees are less likely to feel resentful of their fellow colleagues.

 

When it’s no longer considered to simply be a routine action, recognition is viewed as more heartfelt and personal to the recipient. Whilst there isn’t going to be as much pomp and ceremony around this type of company recognition as it occurs on an ad-hoc basis and in a more casual form, a kind word to commend someone for the work they’ve done recently can go a long way to making them feel appreciated by their employer.

 

References

¹ HBS Working Knowledge (2013), “How to Demotivate Your Best Employees”, Forbes (https://bit.ly/2pQR6bh)