Employee-of-the-Month Programs: Do They Really Work?

Abstract

This article investigates Employee-of-the-Month as a technique for sustaining improved performance on a data entry task in two experiments. In both experiments, participants competed as members of a fabricated team for a “Check Processor of the Week” incentive. The first experiment assessed the impact of receiving this incentive. In the second experiment, the incentive was enhanced to include a $50 bonus for the winner. Participants always placed between 2nd and 5th place in order to assess the impact of being an unrewarded runner-up. Overall, results suggest that Employee-of-the-Month programs do not sustain improved performance and may even have detrimental effects.

Keywords:

• employee-of-the-month
• incentives
• performance feedback
• recognition
• rewards

The authors would like to thank Dana Connor and Robert Long for their help with data collection. The authors would also like to thank Bruce Faulkner and Howard Lees for their financial contributions to this project.