Demotivate with Employee of the Month Programs

Employee-of-the-Month type programs often end up
demotivating employees.

Doesn’t it make sense that if you recognize your employees
you will boost morale and improve productivity?

The answer to this question is “yes.”

The mistake that companies make is that they think that by
selecting one special somebody on some formulaic basis,
such as monthly, that they will provide that special
person with a super boost and encourage others to aspire
to be placed on that “pedestal.”

Research has shown repeatedly that the selection of a
weekly or monthly special person fails to have the desired
impact on the poor performers and frequently results in a
loss of motivation and performance among the good

A recent research paper titled, “The Dirty Laundry of
Employee Award Programs: Evidence from the Field,” by
Harvard Professor Ian Larkin, along with professor Lamar
Pierce and Timothy Gubler sheds light on the issues
surrounding these special recognition programs.

This research paper studied the effect of an attendance
award program and identified the following problems:

#1 Once the rules of the program were announced, employees
tried to game the system.

#2 Once an employee was disqualified according to the
attendance rules, he/she had little interest in
maintaining good attendance.

#3 The productivity of the good employees dropped 6% to 8%
as these people were upset to think that management
launched a program to reward others for the positive
behaviors that they were already exhibiting without any
extra reward.

#4 The overall productivity of the plant declined by 1.4%
due to the fact that the top performers were now
demotivated for a full 8 hours, as compared to the hoped
for productivity increase of the poor performers, which
the award program did not achieve.

The researchers concluded that by rewarding just one
behavior (e.g., attendance) the company minimized
intrinsic motivation of other positive behaviors such as
productivity and teamwork.

HR POINTER: The fact is that the only effective form of
recognition, specifically for non-sales employees, is the
attention and non-monetary recognition that a manager
provides to the behaviors that the manager wants his/her
employees to regularly exhibit.

The problem with this “managerial attentiveness” approach
is that it takes work and most managers don’t want to do
the hard work that it takes to motivate a team. Most
managers want quick fix, employee-of-the-month type
programs to do the work that the managers don’t take the
time to do.

One of the flaws of the attendance award program noted in
the research paper was that the company was rewarding
people for what they should have been doing all along.

Another flaw with the attendance award program was that
the company used monetary rewards, which have been shown
to have a greater likelihood that employees will “game”
the system to win. Research has shown that it is better
to keep money out of such programs.

If a company is going to have a reward program, it should
be for performance that is over and above the expectations
of a person’s job.

Finally, Larkin noted that companies may fare better when
recognizing employees by sending an email to the entire
staff or calling a meeting to recognize certain workers
publicly in front of peers. He said, “You can’t put a
price on that. The recognition of hearing you did a good
job and that others are hearing about it is worth more
than money.”

If you have an interest in establishing a recognition
program for your employees, click on the link below for
our approach to rewards and recognition:

Share With Your Colleagues:
This entry was posted in Tip Of The Week. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *