Announcing the “‍ Employee of the Month” award sounds like a great way to motivate your employees twenty-five years ago. But is the “Employee of the Month” award a good idea today?

For “Employee of the Month” programs to work, you need to ensure that you have other employee recognition ideas and strategies in play.

They cannot work in isolation. Here is everything you need to know why your Employee of the Month program might not be as effective anymore as you thought.

The “Employee of the Month” award was popular because it’s one of the simplest ways to recognize a superstar performer. Often, the employee is given some reward in the form of a bonus.

The “Employee of the Month” award has been around for many years. So, even though it might not be as effective as we once thought, companies often don’t want to stray away from what they know. If it has proven to work in the past, it should work now, right?

Although the “Employee of the Month” award is popular, it has come under criticism in recent years for being outdated and just a "popularity contest."

Is “Employee of the Month” a good idea?

Do you think that the “Employee of the Month” award works?

The answer is no. The major reason is that it only recognizes one employee and is not the best choice when it comes to employee motivation boosters because eventually the other employees will feel left out.  

But if you are already running an Employee of the Month program and it is falling a little flat, here are the six main reasons why this might be happening.

1. Bad selection criteria

There isn't a clear-cut criterion for why the employee is being recognized. Sometimes, the requirements aren’t measurable. This system could become problematic as you then have an employee who doesn’t know why they are getting the recognition.

2. Focus is on recognition

When an Employee of the Month award is put on the table, workers will often focus on achieving that instead of improving their performance and job role. This is especially true if the prize is a bonus.

It’s much more effective to have employees focus on business goals so that the group focus is on a shared purpose and is not blurred by a fixation on a gift.

3. A team cannot be an employee of the month

An ”Employee of the Month” award tends to focus only on one person’s achievements. This means that they often overlook others who may have also worked equally hard that month.

In many companies, it is not a single person who achieves goals, but rather a group of individuals. Unhealthy competition can fester if only one of them is singled out and rewarded for it. Others will feel demotivated and left-out, and harbor resentment for the company and their peers.

4. Encourages unhealthy competition

Some competition is healthy in the workplace. But most companies agree that having employees collaborate and cooperate is better for overall morale and the “Employee of the Month” award does not foster healthy competition.

Other members might feel demotivated, if they are not picked as the month's top employees. This demotivation means that your employees may not perform better as they see no direct reward in it.

As Aubrey C. Daniels (CEO of Aubrey Daniels & Associates) puts it, “The real problem with EOM is that one person's success creates another person's failure, and if the award is truly desirable, it creates destructive internal competition.”

5. Managers think recognition is done with the reward

Recognition is more than just handing out an “Employee of the Month” award twelve times a year. Day-to-day recognition and appreciation are much better and create lasting memories for the employee.

Employers who adhere to strict reward programs like “Employee of the Month” think that’s enough, and they do not need to do more. More often than not, this is not effective and does not motivate employees or enhance their productivity.

6. There are only twelve months in a year

Having only twelve months in the year means that only twelve people can realistically win the “Employee of the Month” award each year. If you have a company of 50 people, this could become problematic.

Many employees will feel overlooked, especially if they work hard and help the company succeed daily.

The best Employee  of the Month alternative

Let's look at some healthy alternatives to the “Employee of the Month” award.

1. Peer-to-peer recognition

Peer-to-Peer recognition allows co-workers to give positive feedback and highlight their achievements. This program works daily so recognition is frequent, unlike an “Employee of the Month” award.

Peers are more likely to know what is going on at work, so the reward feels less political and does not breed unhealthy competition.

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Research has shown that peer-to-peer recognition programs are 35.7% more likely to have a positive impact than manager recognition.

With this program, peers can show recognition to those who have helped them with their work, achieve a job goal, or perform better. This type of award fosters encouragement amongst peers.

2. Multiple awards for employees

Instead of just having one “Employee of the Month” award, why not dole out awards for different categories or criteria.

For example, SnackNation recognizes its employees by giving out a Value Victor award to employees who exemplify the core values of the company during a month. The award comes with preferred parking, a trophy, and a bag of snacks. .

It's good to note that there can be more than one Value Victor, meaning that multiple employees can earn the award and receive recognition for that month.

Another example could be a problem-solver award for employees who worked under pressure to solve problems and find solutions. The “Problem Solver” award recognizes employees who can make a success out of chaos.

3. Collaboration of the month

A “Collaboration of the Month” award is suitable for a team working on a project together. Instead of singling out one person to get rewarded, the whole team receives recognition.

This type of award fosters an environment of collaboration and cooperation amongst the employees, encouraging them to work together as a team and drive workplace performance.

4. Going the extra mile program

Started by Staten Island University Hospital, the “Go the Extra Mile” Program rewards hospital employees for quickly moving hospital patients around or helping the hospital improve efficiency.

It works because employees nominate each other for improving the department's work. Then, the leader or employer tallies these nominations to find the winner. This program puts the employees in the frontline of deciding who gets the award, providing a more democratic way of doing things.

5. Throw a "recognition day" with rewards

What boosts morale better than celebrating a recognition or appreciation day? Employers plan a day where they have a barbecue or some type of party to hand out awards for different actions.

According to Gallup's study, almost 2 out of 3 people received no recognition for their work last year, and 99 out of 100 say that they would like a more positive work environment. So, having a recognition day will not only boost team morale but show your employees that they are appreciated and valued by the company.

6. Recognition through recognizing passions

The ad agency Omelet started a program called 60/60. It gives employees two hours a week to work on a project about which they are passionate. This program is about valuing your employees' passions and showing that you respect them as unique individuals.

Final thoughts

Although a step in the right direction for employee recognition, “Employee of the Month” is outdated, because it doesn’t show your employees that you appreciate all of them. So, ask your employees and take their inputs to design a modern and well-rounded employee recognition strategy.

Try out some of our alternative employee recognition ideas to make sure that all your employees feel appreciated for their hard work.

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Leeza Manocha

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Leeza, an IIM graduate, is a marketer by day who enjoys strategizing for her clients, and a storyteller by night. In her free time, she enjoys cooking and reading.