Is employee of the month outdated? Rethinking modern employee recognition

Is your company still honoring an Employee of the Month?

If so, it may be time to take a closer look at whether that approach still reflects how work gets done today.

Employee recognition still matters deeply. But the traditional, once-a-month, winner-takes-all approach often feels disconnected from real performance and impact.

Why is employee recognition so important?

Every company needs a formal employee recognition program. This type of program is leadership’s way of rewarding employee performance that positively impacts the company.

Employee recognition could be given for:

• Exemplary work quality or customer service.
• High productivity.
• Particularly strong commitment to the company mission.
• Embodiment of the company’s core values.
• Demonstration of any other desirable behaviors or traits in the workplace.

It reinforces what’s important to the company and what is expected of employees, and supports a positive workplace culture.

From employees’ perspective, recognition makes them feel seen and valued. We all want the assurance that we are doing a good job and that our efforts matter. We all want the leaders of our workplace – the place where we dedicate so much of our lives – to notice us and demonstrate appreciation for our accomplishments. Right?

The prospect of company recognition not only motivates employees to do well, but also is tied to employee morale, satisfaction and engagement, which all ultimately influence retention.

In theory (and in years past), Employee of the Month would check all these boxes and serve as the centerpiece of an employee recognition program. But today, that’s really no longer the case.

Why does Employee of the Month no longer resonate with the workforce?

When we think of the traditional employee of the month, what sort of prizes come to mind? Often, it is stuff like a:

• Preferred parking space
• Plaque or certificate
• Sign in a breakroom
• Lunch out with the boss
• Funny object of some sort that sits temporarily on a recognized employee’s desk

What do all these examples have in common? They are tied to a physical office space.

In today’s world, a lot of these prizes have lost their relevance and therefore their value to employees. The employee experience has simply changed for good.

But it goes deeper than that.

There are many generational differences in the workplace – and preferences for employee recognition are among them. Generally, Boomers and Generation X have desired to do a good job for the sake of doing a good job and the satisfaction of earning recognition.

Especially among younger employees – Millennials and Generation Z – a massive shift has occurred in the types of recognition they find meaningful. To them, Employee of the Month is passé. It’s not enough for them to just get a pat on the back.

Instead, they want to understand the significance of employee recognition. They want to know:

• How employee recognition directly translates into future opportunities for them at the company.
• The objective criteria for selecting employees and what the decision-making process entails. (Transparency is key.)
• If this honor will help them in any way out in the job market.

In other words, what’s in it for them and why do they care? Why is recognition worth their attention, time and effort?

Employee recognition is no longer about short-term, feel-good prizes. It’s about long-lasting, meaningful benefits that confer positive outcomes.

With Millennials and Gen Z being the future of the workforce, this trend is not likely to reverse.

How might Employee of the Month harm your business?

Cling to outdated forms of employee recognition at your company’s peril. If you persist in promoting Employee of the Month, you may find that your company:

• Has challenges establishing authentic connections and building relationships with employees.
• Gains a reputation as being regressive and stuck in the past.
• Experiences lower employee engagement and productivity associated with an employee recognition gap.
• Has retention issues.

What does a modern employee recognition program include?

For starters, the modern employee recognition program is centered on the idea that every employee is different and wants different things. The workforce is not a monolith. What one employee finds meaningful, motivating and empowering, another won’t.

Furthermore, some employees want public recognition – they thrive on external validation and praise. Others might be mortified by the attention and are happy with a private thank you.

Generally, think about what most employees actually need and what would improve their livelihood. From this list, allow employees to choose what works best for them.

That said, here are some popular recognition options that many companies offer to their employees:

• Extra mental health or wellness days (“comp days”) that do not count as standard paid time off (PTO).
• Added flexibility, such as the opportunity to work from home an extra day or leave work early on a random day of their choice.
• Spot bonuses.

To win really big with Millennials and Gen Z, go a step beyond and consider how your company can positively impact employees and their careers for the longer term. Examples:

• Opportunities to advance in knowledge and skills through professional development. This could be enrollment in a course the employee is interested in, attendance at a conference or event, a mentorship or even just the chance to shadow someone in their dream role.
• Opportunities to share their knowledge or showcase skills with others and build up their thought leadership.

Want to brainstorm further? Here are many more employee recognition ideas for today’s workforce. 

Also, don’t overlook the power of peer recognition. Sometimes recognition from one’s own peers – the people with whom employees work the closest – can be more meaningful than recognition from leaders, who may be somewhat removed.

How can companies get started updating their employee recognition program?

1. Talk to your workforce

The best way to know how your employees want to be recognized is to ask them directly. You can do this during regular one-on-one meetings with team members or distribute an employee survey.

From these discussions and surveys, trends should emerge.

2. Communicate the results

Identify the types of recognition that your company can manage from a budgetary and practicality standpoint, and that exemplify your company’s values.

Announce to employees what the updated employee recognition program entails and document it in writing.

3. Form a council comprising leadership and individual contributors

In the spirit of promoting transparency in the workplace and encouraging peer-to-peer recognition, involve team members at all organizational levels in the decision-making process each time an employee is selected for recognition. Make sure everyone is aware of the criteria for employee recognition.

Remember: an employee’s peers have a unique perspective of their performance and understand the value of each person on the team differently than leaders.

4. Incorporate recognition into employee records

To be effective, employee recognition must be materially beneficial for employees. Regardless of what form the recognition itself takes, document the recognition event in the employee’s file so that it becomes part of the review cycle. Tie recognition and its frequency to salary increases or promotions.

Key takeaways

• In past decades, Employee of the Month was an effective form of recognition that catered to employees’ desire to do a good job in exchange for a short-term reward and the satisfaction of recognition itself. Significant workplace evolution – particularly the rise of virtual/hybrid workplaces and the influx of younger workers – has changed the game.
• Today’s employee recognition programs embrace diversity in employee preferences and focus on things that make a significant difference in employees’ lives right now as well as a long-term impact on their career and professional development. The keywords are: meaningful, effective and impactful.
• Any company looking to update its employee recognition program should first talk to employees to find out what types of recognition they want, then provide greater transparency into the criteria and decision-making process.

Employee recognition is a major part of the employee experience, impacting employees’ engagement, morale and productivity. For more information on how to retain high performers, including a robust employee recognition program, download our free e-book: The real-world guide to attracting and keeping top talent.