The “Employee of the Month” title is a well-known and widely recognized award given monthly in companies or smaller businesses. It is intended to boost productivity, highlight desirable behavior, encourage motivation among employees, and reward those who have demonstrated exceptional commitment.
However, it’s also known that this type of recognition can backfire and trigger negative feelings among employees.
Why does this happen? Should we even select an Employee of the Month? And how do people truly feel about it? Keep reading to find out.
What Is the “Employee of the Month” and How Is It Chosen?
The “Employee of the Month” is a recognition awarded to a selected employee, aiming to promote productivity, reinforce desirable behavior, and encourage motivation.
Employees are typically chosen based on the following:
- Quantitative results: for example, most sales, tasks completed, fewest errors
- Qualitative contributions: for example, promoting teamwork, showing initiative, providing innovative solutions
- Compliance with company values: for instance, adhering to rules, supporting colleagues, demonstrating accountability
The selection process must be clear, transparent, and fair. If it feels arbitrary or biased, it can have the opposite effect—creating division and dissatisfaction within the team.
What Effect Does the “Employee of the Month” Title Have on the Selected Employee?
- Boosting Psychological Well-being
When an employee receives this award, they receive public recognition for their efforts. This external acknowledgment affirms their value and serves as powerful fuel for continued performance.
- Motivation and Role Modeling
Publicly highlighting positive behaviors sets an example for others. Employees see which values are appreciated and may be inspired to emulate them.
Interestingly, symbolic and personalized rewards have a greater impact than moderate monetary rewards, which are often quickly spent and forgotten.
How Do Non-Selected Colleagues Feel About the Title?
Since only one person is selected each month, it’s natural that other employees will experience a range of emotions. These should not be ignored.
Positive reactions may include:
- Increased motivation in hopes of being recognized next month
- Development of healthy and constructive competition
- Strengthening of team spirit through mutual support and shared goals
However, adverse reactions are also possible:
- Frustration and the feeling that their work is not valued correctly
- Dissatisfaction and a sense of unfairness if criteria are unclear or inconsistent
- A Harvard study shows that introducing these programs can lead to a 6–8% decrease in productivity when employees feel demotivated
- Increased social competition, unhealthy tension, and team conflict
- Excessive focus on one individual may create resentment and reduce collaboration, especially when employees compare themselves to one another (as explained by the theory of social comparison)
Psychological Effects: How the Program Impacts Individuals and the Team
- Intrinsic vs. Extrinsic Motivation
- Excessive reliance on external rewards can reduce intrinsic motivation (known as the overjustification effect)
- Striking the right balance is crucial: recognition like “Employee of the Month” should support intrinsic motivation, not replace it
- Impact on Workplace Atmosphere
- Focusing solely on individual achievements can harm the organization’s psychosocial climate—feelings of envy or exclusion reduce employee engagement
- The goal should be to foster a healthy, supportive work environment, not a competitive one
Should Every Business Have an Employee of the Month Program?
If the selection process is fair and transparent, then yes—recognizing an Employee of the Month can and should be part of company culture.
Well-designed programs have been shown to reduce staff turnover by up to 31% and increase productivity by 14%. Major companies often have comprehensive recognition strategies that go beyond monetary bonuses or generic e-cards, opting instead for personalized rewards that have a lasting positive impact on the team.
On the other hand, if the program is unfair or lacks transparency, it can result in widespread demotivation. Rather than fostering collaboration, it can amplify competition.
The conclusion is that this type of recognition should be thoughtfully implemented, with clear criteria and positive reinforcement for the entire team. Only then can the program produce healthy and meaningful outcomes.
How Should HR and Managers Structure an Effective “Employee of the Month” Program?
To ensure the award is meaningful and doesn’t backfire, managers should follow these key principles:
- Transparent criteria: Clear, standardized point system understood by all employees
- Monthly recognition, but also micro-rewards: Spontaneous praise or gestures of appreciation throughout the month
- Team rotation and category variation: Recognize both individual and team contributions
- Personalized messages: A handwritten or customized note is far more impactful than a generic email
- Peer involvement: Allow team nominations with clear guidelines to reduce bias
- Improving the psychosocial climate: Avoid rankings that reduce support and collaboration
The “Employee of the Month” title can be a powerful motivational and recognition tool—but only if carefully designed and fairly executed.
For the selected employee, it boosts self-confidence and reinforces their strengths. For others, it can be a source of motivation—but also a source of frustration or a feeling of being overlooked, especially if the process is unclear or perceived as unfair.
That’s why the program must be built on transparency, personalized gestures, and team-oriented recognition. When done right, it helps create a more positive, productive, and engaged work environment.