"EMPLOYEE OF THE MONTH" AWARDS NOT SO GOOD FOR PRODUCTIVITY

(March, 2016) Do you work at a place that gives out “Employee of the Month” recognition? A new study from the University of California, Riverside, finds that more than 80 percent of companies use award programs like “Employee of the Month” and “Top Sales Club” to motivate employees and increase performance. They also found that these programs might be reducing firms’ overall productivity. The study shows that these seemingly innocuous non-financial award programs can upset the status quo and influence perceptions of equity and fairness. This can lead to employees becoming disenfranchised. The study, performed at five industrial laundry plants in the Midwest United States, found:
– Reward-motivated employees responded positively to the awards by reducing tardiness, but then those same people gamed the system to maintain eligibility using sick days and reverted back to poor attendance behavior when they lost eligibility in a given month.
– The awards crowded out motivation in internally-motivated employees (those who just like doing their job) who were already performing well by coming on time in the absence of rewards. These employees had increased tardiness after the program was implemented and they lost eligibility.
– The awards decreased motivation and productivity for internally-motivated workers, suggesting these employees were unhappy because of fairness and equity concerns.
– In total, the award program cost the plant 1.4 percent of daily productivity, mainly because of the lost productivity by internally-motivated employees.
(Study published in the journal Organization Science, “Motivational Spillovers from Awards: Crowding Out in a Multitasking Environment”)
* Short version: when you win Employee of the Month, all your jealous co-workers hate you, you smarmy suck-up.
* I like when the Employee of the Month gets a special parking space up near the front door so it’s easier for everybody else to key their car as they walk past.
* Losing 1.4 percent productivity for making your employees feel good? Golly!
* So instead of $100, your company would make $98.96 that month. Horrors!
* Plus you’re out the price of the plaque.
* Maybe we should just give everyone a Participation Trophy if they show up at work.
* I didn’t realize working at an industrial laundry plant in the Midwest was so complicated.
* Don’t you pretty much just fill the tank with clothes and water, dump in some soap, and turn it on?
* The programs could be affecting equity and fairness? It’s a job. What does equity and fairness have to do with anything?
* “These programs might be reducing productivity…although we really have no idea and could be making the whole thing up.”