6 Reasons to Nix "Employee of the Month"

Before I continue with this post, allow me to pre-emptively address some criticism: I know to some people I’m already “cussing in church” when it comes to the title! I am well aware that I’ve already offended those of you who invest so much in the hallowed tradition of making sure that just one of your employees feel special every month. You maybe have clicked on this post just to object! If that is you, then I’d ask you to bear with me. I realize I have a strong opinion about this topic and I’d like to make a case for my opinion. I also respect your strong opinion to the contrary and if you write a post or comment in support of your position, I promise to read and consider it. With that said, let me tell you why your “Employee of the Month” program—and a few other things you do in the name of recognizing your people—may be doing you more harm than good.

It has been almost two years since I left my corporate career behind, but I still remember going home excited on every payday, for 31 years straight, and hollering at the top of my lungs, telling my wife how happy I was to have gotten paid, and, due to such magnanimous treatment by my gracious employers, once again committing to give my all and the very best I could offer to the company! Sound familiar?... Of course not! I mean who does that?! I’m pretty sure no one in the history of the world has acted that way.

How often are we overjoyed and full of appreciation for getting something we were supposed to get all along? Hardly ever. Now, on the other hand, if you didn’t get your check when it was due or didn’t get it at all, I’m pretty sure you’d be a little bent out of shape! If it arrives on time every month, well, who cares? That’s how it’s supposed to be. You aren’t exhilarated, and you probably aren’t really even happy per se. You just aren’t unhappy! This is because, while not getting a paycheck on time is a huge dissatisfier, continuing to get your paycheck on time does nothing to move you beyond baseline satisfaction.

Part of the reason this happens is that it is human nature to take the status quo for granted and return to a baseline level of happiness in stable situations, regardless of how objectively good or bad they are. This is why those of us who live in modern, developed nations don’t wake up and jump for joy because of running water, electricity, refrigeration, and the climate controlled domicile that contains all these wonders. This is despite the fact that, put in historical context, we all live like kings and queens or even gods, and most of the luxuries we take for granted would be seen as literally miraculous by those living just a few decades ago. This natural tendency to return to baseline happiness is called hedonic adaptation, or sometimes, the hedonic treadmill, and it essentially assures us that permanent, lasting happiness is an illusion, a carrot on a stick, a goal that we can never reach. And, strange as it may sound, that isn’t necessarily a bad thing.

It means that our emotions function sort of like a thermostat, where we generally fight tooth and nail to correct or escape negative situations, but when things are back to our “set point,” we generally leave things as they are unless there is some significant benefit to working for more. Paradoxically, without hedonic adaptation, we would become stagnant and end up settling for far less than extraordinary, individually and as a society, because any benefit or novelty experienced would last forever; if that were the case, we might all still be living like cavemen or worse! So, hedonic adaptation drives us to keep moving forward, to keep pushing for progress and for things to get better and better, no matter how good they may be right now. On the other hand, it means that the more common and expected a reward or benefit becomes, the less impact it has because it becomes our default.

This is the major problem with “Employee of the Month” programs and programs similar to it. Despite the good intentions behind them, they eventually lose their power because as become systematized and expected. When intrinsic rewards, such as recognition, are structured and administered like extrinsic rewards, such as a bonus or getting a paycheck, they lose their effectiveness and, in fact, take on the negative characteristic of extrinsic rewards. Let’s quickly go over their characteristics to understand why this is:

I have managed several operations and I understand all too well that we don’t always have the luxury of dispensing extrinsic rewards, such as pay, spontaneously in abundance. But why overly structure our recognition programs and act like there is only so much to go around? It makes no sense.

Now, before you go waving the “Everybody shouldn’t expect to get a trophy!” card (AKA the special snowflake, “millennials just want participation trophies” card), let me clarify that I am not advocating that everyone be given vapid recognition for no reason at all. I believe there ought to be high standards for recognition, but unlike the scarce resources that have to be divided on a zero-sum basis, we don’t necessarily have to artificially choose only one employee to recognize if five people have crossed the threshold of excellent performance. I also believe it is absolutely fine to have special recognitions for the one person who performs better than everyone else. There may be an award for the highest sales or best customer service rating or other select accomplishments where it would be an honor to be recognized for having done better than everyone else. But designations like “Employee of the Month” carry a certain connotation and they do far more damage across the organization than the excitement they bring to one person at a time.

In summary, the six distinctions I have listed above should give you a few reasons to start re-evaluating your “Employee of the Month” program. I hope you will consider that other highly structured intrinsic rewards may be doing more harm than good, and decide to either eliminate or modify them to continuing serving their intended purpose in the future.

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About the Author: Amir Ghannad is an international keynote speaker, author of The Transformative Leader, leadership consultant, culture transformation champion, and founder of The Ghannad Group. He has made it his life's work to guide leaders and equip them with the tools, skills, and the mindset necessary to create extraordinary workplace cultures that deliver breakthrough results. Download his free e-book, titled 5 Practical Steps to Make Your Culture Transformation Stick by clicking here.

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As always, have a great week! May you Boldly Declare, Courageously Pursue, and Abundantly Achieve the Extraordinary!

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