“The pervasive ‘Employee of the Month’ incentive is a poor strategy for motivating employee productivity,” contends Gregorio Billikopf, a labor management farm advisor for the University of California.
Billikopf explains that competition for the award usually takes place among the top 15 percent of your workforce, so only your top employees will be motivated to compete. The rest will either ignore the incentive or hold a grudge toward your business and the award recipients.
As a result, managers end up limiting the frequency that employees may earn the award to avoid having the same people win over and over again.
“At the end, the honor is little more than taking turns to celebrate different employees,” Billikopf says.