Why you should NOT have an employee of the month Click To Tweet

Rewarding your workers with “employee of the month” recognition is so common that it’s basically a given at most companies. And if everyone else is doing it, won’t your employees enjoy the same perk?

Well, maybe not. There’s no doubt that recognizing employees for their achievements is important. 50 percent of employees believe increased recognition would reduce voluntary turnover, according to CareerBuilder, while 40% of employees who don’t feel meaningfully recognized will not go above their formal responsibilities, according to Badgeville.

That said, a growing body of evidence suggests that we may have the way we carry out these recognition schemes all wrong.

In some circumstances, “employee of the month” programs inadvertently demotivate some employees by breeding unhealthy internal competition through public recognition. According to Aaron Skonnard, CEO of Pluralsight:

“While rewards and recognition programs are designed with the good of employees, teams, and the company in mind, they tend to backfire for a simple reason. When you raise one person up on a pedestal, it leaves others below on the ground. And some of those left behind may feel resentful.”

Further research – a paper called The Dirty Laundry of Employee Award Programs: Evidence from the Field by Harvard Business School Assistant Professor Ian Larkin – took aim at employee recognition schemes designed to reward good attendance.

While measuring the impact of attendance award programs at a commercial-industrial laundry company over a nine-month period, Larkin and his colleagues found:

  • Employees who previously had excellent records suffering declines in attendance and productivity (perhaps because – as Skonnard suggests – they were “turned off” by seeing others rewarded for something they were already doing).
  • Employees behaving better only when they were eligible for awards, rather than demonstrating long-term performance improvements.

So, if “employee of the month” or other standard recognition programs fail to drive desired outcomes for managers and business owners, what should take their place? Consider the following suggestions on engaging your workers, based on emerging research on employee performance incentives.

Recognition Schemes That Really Work

An Entrepreneur.com article on “The Best Way to Reward Employees” makes an excellent suggestion. As you plan your intended recognition schemes, keep two questions in mind: “‘What am I compensating my employees for?” and “What are the behaviors I want to reward?’”

Make sure recognition schemes promote both positive behaviors and performance. In many cases, this might involve putting two types of recognition schemes in place: “one off” rewards that let you recognize good behavior when you see it, and ongoing programs that give employees something to aspire to, performance-wise.

“One Off” Rewards

It’s important to provide timely feedback on staff’s performance. It’s a bit like when you’re training a new puppy. One of the first things you’re taught is that discipline needs to closely follow the event that triggered it. If, for example, you wait an hour after your dog has had an accident, he won’t understand that the discipline you’re enforcing came as a result of the earlier behavior.

Obviously your employees aren’t pets, but the same principle still applies (in reverse). If you wait until an employee’s annual performance review to share praise for a positive behavior, there’s little incentive for the employee to continue that behavior in the interim. There’s no recognition, and no reward for doing so.

For this reason, it’s smart to implement rewards that let you recognize positive performance when it happens. This is especially important if your workforce contains a large contingent of Millennials, who have been conditioned from an early age to expect regular, ongoing feedback on their performance.

Here are a few ideas for one-off rewards:

Send a handwritten note

Put pen to paper and let employees know that you’ve noticed their positive actions. Taking the time to handwrite your message automatically gives it more weight and meaning than the same information sent via email.

Recognize an employee’s efforts publicly

The next time you have the opportunity to do so, recognize your employees’ top efforts in front of the whole company, the C-suite or the worker’s manager (if that isn’t you). Doing so proves that good behaviors don’t occur in a vacuum, and that great performance is a viable route for getting the attention of upper management.

Recognize great employee actions on company social media pages

Social media pages can be a great way for brands to reach out to customers, but they also represent an opportunity for these same companies to recognize their top workers. A quick picture and a caption stating the employee’s good deed are all you need to make this recognition strategy work.

Write the accomplishment in a memo

Send handwritten notes and recognize employee efforts publicly, but after that, take the time to write your observations down in a memo for both company execs and the employee’s file. That way, even if the information is missed in the moment, it’ll be on record whenever the employee’s file is reviewed in the future.

Give credit when employees contribute good ideas

Offering recognition doesn’t have to involve documentation; it can be as simple as ensuring employees’ voices are heard and that ideas are attributed to the appropriate sources.

Suppose an employee shares an idea with you that you successfully present to your company’s CEO. While it may be tempting to take the credit yourself, sharing the true source of the idea makes you look even better and boosts team morale at the same time.

Send out a “daily wins” email or intranet message

Depending on the number of employees you manage and the number of wins you want to recognize, it may be more efficient to send out regular “daily wins” announcements showcasing all of the team members you want to thank.

Pass around a “funny” trophy

Employee recognition doesn’t always have to be formal. Don’t be afraid to have fun with it!

Come up with a “funny” trophy that can be passed from person to person. Here’s SnackNation’s take on the concept – a “world champion of the office” wrestling-style belt:

Image Source: SnackNation

Create a “prize bucket”

A $5 coffee gift card is hardly a burden on your company’s bottom line, but it can mean a great deal to the employee who receives it. Create a “prize bucket” filled with movie tickets, small denomination gift cards and other token gifts that employees can choose from whenever their managers notice exceptional performance.

Create a “prize wheel”

As a related recognition tip, put your prizes not in a bucket but on a wheel employees can spin as they’re recognized.

Image Source: SnackNation

Surprise employees with their favorite treats as a way of saying thank you

If you know an employee loves Snickers bars, drop one off the next time you want to recognize their performance. Not only will the employee appreciate the gift, they’ll find the personal thought that’s gone into it to be extra meaningful.

Give a LinkedIn recommendation for above and beyond work

Finally, if you encounter really exceptional behavior, a positive LinkedIn recommendation is one of the biggest gifts you can give the employee in question.

Ongoing Programs

“One off” recognitions are great, but they tend to be concentrated among the employees who are most vocal about their work. Ongoing programs, on the other hand, ensure those who do great work but tend to fly under the radar are similarly rewarded.

Throw a “Recognition Day” party with rewards

This fun idea comes from Sabrina Son of TINYpulse:

“Organize a formal employee recognition day at work. Make a whole event out of it with food, awards, and team-building activities.”

Bring in lunch when teams meet their performance goals

On a smaller scale, consider catering in a special lunch when your teams hit goals they’ve set (or, as a variation, take the team out for happy hour on the company’s dime). Recognizing the entire team ensures those who make less vocal contributions get noticed.

Put together a peer nomination scheme

Let your employees suggest others for recognition – just be sure to keep the focus of the program positive. Jodi Kantor and David Streitfeld, writing for the New York Times, give the example of the harsh culture at Amazon, where peer evaluation programs grew nasty:

“At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are ‘unreasonably high.”

Use “gamification” and badges that can be traded in for rewards

“Gamification” has long been a trend in app development, but more and more HR teams are adopting these systems to motivate employees. Spend a day coming up with fun badges (for example, “Didn’t blow up at a rude customer”), and develop a system that translates badges into rewards or other types of recognition.

Let employees send “micro-bonuses” to each other

Though this may sound complex, tools exist to facilitate the implementation of a micro-bonus scheme. For instance, the team at ZipRecruiter uses the bonus.ly program to allow employees to send micro-bonuses to their co-workers as a thank you for great performance.

Send top-performing employees or teams to conferences or professional development programs

Show your employees that you’re willing to invest in those who put the company’s needs first by sending them to training programs they’ll find beneficial.

Use performance recognition schemes to decide when employees get new and improved job titles

Job titles used to be rigid; these lines blur every day as new company structures influence the way roles are defined. Amidst these shifting circumstances, why not take the opportunity to tie job title advancements to the recognition programs you’ve developed? While they shouldn’t be the only factor in title determinations, they can provide a powerful incentive to employees hoping to move up the ladder.

Give company stock/equity ownership as a reward for exceptional performance

Finally, if keeping star players on your team is important, consider investing in them not just as employees, but as partners as well. If this strategy interests you, be sure to consult with a lawyer familiar with equity issues. There will be many hoops you’ll need to jump through before stock transfers for positive performance can be completed.

A word of caution

One final word of caution: No matter what type of company you run or what type of recognition scheme you implement, it’s critical that you continually reevaluate your program. As the examples in the introduction show, even the most well-thought-out plans can produce negative results if they aren’t received well by individual groups.

Launch with the recognition programs that seem to best suit your unique workers, then check back periodically to ensure the schemes you’ve implemented are having the desired effect.

Is it meeting your recognition goals? Is it unintentionally breeding resentment? Don’t be afraid to make changes until you strike the right balance.