Are employee awards a good idea?

Employee Award

When the discussion of how to compensate and reward employees comes up, almost invariably someone comes up with the idea of the “employee of the month” award. Sometimes the name of the award is less tired, maybe it’s outstanding associate of the year. Or the top achiever of the quarter. It doesn’t matter what you call them, these kind of awards are a bad idea.

Every time I tell people not to fall for this easy trap in the employee compensation world, they object. They complain that I’m harping on them all the time to think of ways to reward employees that don’t involve money. They say: “here’s a great way to reward people for good performance, it’s cheap, what more could you want?” And there are hundreds of companies that proclaim to make “tools to motivate employees” who push this junk (here’s a link to one).

For the first clue as to what’s wrong with these kind of awards, walk into your local fast-food joint, distribution company, or supermarket. There, over in the corner, you’ll see it. The dusty brown frame with little brass name plates, and maybe faded photos taken from employee badges. The employee of the month award plaque. Look carefully. What’s the most recent date? If you’re lucky it will only be six months ago. I’ve seen some as old as three years, with not an update since. I don’t think I’ve ever seen one with more than ten months on it.

It’s hard to keep up the momentum with these things.

The first and most obvious problem is that it’s hard to keep up the momentum with these things. With all the things you have to do to run a business every month, this inevitably falls to the bottom of the list. So for a couple of months you wrestle with it to get it done at the last minute, then you find yourself a month or two behind, finally it just falls by the wayside. What a message this sends to the employees: you can’t even find time for this simple little form of recognition.

Employee of the Month
Employee of the Month

Another problem is also obvious. Look closely at that plaque. See any patterns? Yes, you see the same couple of employees over and over again. And why is that? Because you really only have two choices when awarding these things: 1) be honest and give it to the best employees, or 2) rotate it around and give it to everyone once. In the first case, the same few employees will consistently rise to the top. In the other case, the award becomes a joke to the employees. Which is why it’s always done the first way. And the pattern is inevitable. What a wonderful message it sends to your employees, that only a handful of them are worth recognition.

Which brings us around to the effect of these awards on the employees. Does it really reward the winner? Or do they feel awkward for being singled out in this beauty contest that really doesn’t mean anything? They know there is no money in it, they know the choice wasn’t really objective (more on that later), and they know you’re not recognizing them because you want to, but because it’s the end of the month and someone has to get the silly thing. They also know they are either going to get a lot of grief from their friends for winning it, or a bunch of resentment from others who didn’t. So they sheepishly accept it, and the flaccid applause of the folks gathered in the lunchroom, and go back to work.

More often than not, they feel like… losers.

What do the non-winners (the other 99% of the employees) think about it? More often than not, they feel like… losers. To make themselves feel less like losers, they badmouth the award, and tell everyone that only idiots and suckups get it. And they probably give the winner a hard time for winning it. They certainly don’t say to themselves: “gee how do I get one of those?”

Which brings me around to the final point: how do you make this decision? If the choice is truly objective (top sales, lowest complaints, etc.) you need to resign yourself to the fact that you have no control over the award. And constant repeat winners are inevitable. And the losers, who already know they are losers, certainly don’t need this award to rub their noses into it.

Or, you can make the award be more subjective: “most eager”, “best team player”, or maybe “best overall”. This puts you back in control, but then it introduces a number of problems. Like accusations of favoritism. Or having it seem arbitrary. Or second-guessing from all corners about why you chose who you did that make a baseball argument look like a picnic. Ugh…

The more you think about employee awards, the less you’ll think they are a good idea. I have a number of thoughts on better ways to reward and recognize your employees. Stay tuned to for more.