Setting Up an Employee of the Month Program

by Ty Collins on June 24, 2020 in Employee Engagement, Employee Loyalty

Businesses face high levels of employment competition both locally and globally. For long-term success, business leaders must foster a team environment that regularly inspires peak performance levels. Otherwise, star talent will leave for greener pastures. According to statistics gathered by Deloitte, companies that have highly effective employee recognition programs have 31 percent less turnover than those that have ineffective worker recognition programs.

Armed with this data, smart companies move forward with enhanced employee of the month programs that are tailored to today’s challenging business environments. Keep these five key considerations in mind when you update your organization’s employee recognition and rewards program.

1. Define Your Goals for Your Employee Recognition and Rewards Program

The employee of the month is supposed to be your organization’s chosen model for the workforce. If managers don’t know the objectives of the monthly recognition and rewards program and how they link to the company’s long-term strategy, they can pick anybody each month to win the award. Eventually, this will negatively impact morale since employees won’t know the correct behaviors to model to get recognized or rewarded. To make your program effective, you’ll need to establish specific goals for it that are challenging yet achievable. Here are some sample goals.

Improve Customer Satisfaction

You know that it’s more cost-effective to keep a current customer than to capture a new one. This age-old business principle makes improving customer satisfaction a worthy goal for any employee recognition program. Since every employee likely believes that his or her customer service skills are on point, how do you distinguish between the employees who are walking the walk and those who are just talking the talk? Let your customers be your guide.

Create customer service cards that briefly ask customers about their experiences with the company. These cards can be in a physical location or available via an online form. By asking detailed questions, you’ll be able to determine what the customer liked and didn’t like about his or her experience and which employee worked with the person. To get more responses, give customers token incentives to give feedback such as free product samples. Let the first month of customer responses be the baseline for the program. Assess improvements after a month. Determine which worker contributed most to those successes.

Generate New Leads

While it’s harder to get new customers than to keep your existing ones, generating new leads is critical for sustained growth. This an opportunity to let your employees get creative and think outside of the box. If your employees love hanging out on social media platforms, encourage them to post some brand-friendly content. When you send employees to conferences or trade shows, remind them to be ready to network with potential clients using business cards and friendly, informal text messages. You can even reward an employee who uses platforms such as Help a Reporter Out to get media coverage for the release of a new product or service.

Increase Sales

Depending on the market and your target audience, closing sales can be very difficult. Customers who purchase big-ticket items often have plenty of questions before they make final purchasing decisions. Knowledgeable salespeople who leverage the latest technology can answer these questions efficiently and have time to reiterate the benefits of your product or service and any peace-of-mind guarantees that your company offers.

Raise Productivity

When a product or a service is in great demand, productivity matters. You can choose to reward employees who go above and beyond to get quality products out the door according to the company’s current protocols. You can also recognize employees who step back, take a look at existing processes, and give recommendations to make company processes more efficient for their entire departments. Base your goals on the levels of autonomy and empowerment that you’ve granted to your employees.

2. Establish the Playing Field

Every employee recognition and reward program has its own set of rules and boundaries to make things fair. Consider recognizing an employee from a different department each month to ensure that you do an apples-to-apples comparison when you choose your employee of the month.

Employees often have different roles to perform. If every month’s goal is to increase sales, your company’s cashier will have a distinct advantage over your IT network administrator when it comes to winning monthly awards. Besides structuring the awards to make sure all employees have a chance to win at some point throughout the year, here are some other important rules to consider.

Who Can Win

It’s very rare that a new person can join an organization and lead the team to victory right away. Brand new employees often need to learn how the company does business and find their niche within the organization. True value creation comes a little later, and many managers expect this. These new employees normally can’t expect to gain the company’s top recognition award right away. If your organization is similarly structured, you can make a rule that an employee must have at least six months of service to be eligible to receive the monthly recognition award.

Inevitably there are one or two employees in your organization who are natural leaders. They shine in any situation that’s thrown their way. However, an important goal of your employee recognition program is to inspire increased performance across your staff. You may want to make a rule limiting the number of times per year that an employee can win the monthly recognition award.

Selection Panel

Praise that comes from management is highly valued by employees. This type of recognition can mean the difference between an employee powering through a rough assignment or taking another job with your nearest competitor. However, public recognition is far more impactful when winners are chosen by managers who have in-depth knowledge of their work.

Selection Criteria

Effective monthly recognition programs have measurable selection criteria. An employee may earn a predetermined number of points for hitting sales targets during a select time period. More points can be earned by leads generated. At the end of the evaluation period, the team’s points can be compared to see who won the award at the end of the month.

Imagine that your co-worker happens to best you in sales and lead generation by only a few points each month. How discouraging is that? You can minimize these disappointments by letting a percentage of the employees’ points roll over into the next month while zeroing out the points for the previous month’s winner. Eventually, you can recognize everyone’s outstanding accomplishments. Star employees will continue to rack up points to win valuable awards.

3. Get Employee Buy-In for the Program

Every successful employee recognition and rewards program has one thing in common. They all have some level of employee buy-in. The best way to get your workforce on board with the new program is to bring them into discussions about award administration.

Get Workforce Feedback About Types of Incentives

Nothing can kill an employee recognition and rewards program like incentives that don’t match the values of the recipients. While you may have a good idea about the types of incentives that your employees would like, it’s best to verify your knowledge by asking your workforce about the types of incentives that mean the most to them. While some staff members may value a luncheon with the top brass, others may think that the company can do no wrong by allowing them a paid day of leave to volunteer with their favorite charity. Engaging your workforce about incentive awards lets them know that the company’s leadership values their opinions.

Incorporate Peer Recognition

Critics of employee of the month awards point out that real performance achievements are often accomplished by a team and not an individual. This is true. However, there are always stand-out team members who make the difference between meeting important performance milestones and falling short. Managers know this but so do team members.

One way to reduce unhealthy competition and feelings of resentment among team members is to allow them to nominate their peers for monthly recognition awards via secret ballot. You can generate the forms to elicit relevant information about team members who went out of their way to help others complete a project on time or those who volunteered for undesirable duties or shifts during critical work periods. When team members honestly think about the contributions of others on the team, they are less likely to be upset when one of their teammates wins the monthly award.

Your monthly recognition incentive shouldn’t prompt a popularity contest among co-workers. It also shouldn’t be exploited by managers who have political agendas. Use peer nominations to supplement the nominations by managers who are on the selection panel. Let your workforce know that their nominations give the selection panel a clearer picture of workers’ achievements.

4. Select Worthy Incentives

After you understand the types of incentives that your workforce values, it’s time to wow them with your selections. Offer incentives that incorporate elements of recognition and rewards. Choosing strategic incentives that match your workforce and that drive business-enhancing action is the objective.

Monetary vs. Non-Monetary Awards

Incentivizing employees to reach high-performance goals is nothing new. Managers relied mainly on cash bonuses or high-quality watches to reward employees of the past. Today’s monetary and non-monetary awards are a bit more sophisticated and thoughtfully curated.

Monetary awards for today’s employees of the month can include anything from a raise to company stock options. While no employee is going to turn down a cash award, studies show that sometimes non-monetary awards have the greatest impacts on workforce morale, performance, and job satisfaction.

Non-monetary awards are incentives other than direct cash payments. Some popular examples of these awards include dinner with the CEO, staff training, and all-inclusive trips to conferences. Industry experts find that non-monetary awards help companies to establish more emotional connections with their star employees than monetary awards. An employee isn’t likely to forget the company-sponsored trip to Barbados with his family in tow, but he may easily forget the cash bonus that went to pay down his student loan debt.

Custom Crafted

You realize that differentiation is what makes you special in the marketplace. It’s what makes your customers drop your competitor’s product in favor of yours. You gain this advantage by giving your target customer a product that meets a specific need in the best possible way. This is the same approach to take when selecting incentives for your monthly employee recognition and rewards program.

Incentives should be carefully curated selections that promote your company’s brand, drive certain organizational outcomes, and are enjoyable to the winner. You’ve created a culture of collaboration and teamwork. An incentive for an outstanding employee in that environment could be a team-building outing for her entire department in her honor. With this choice, she gets recognized, and her teammates share in her reward.

Flavor of the Month

Offering the same incentives year after year can get old fast. Your employees are encouraged to think outside of the box and innovate. Shouldn’t their recognition and rewards be fresh and exciting too? If you run out of incentive ideas, don’t panic. There are companies that specialize in building five-star employee incentive programs that get proven results. They tailor incentive programs to your organization’s operations, workforce’s level of effort, and budgetary constraints.

5. Celebrate Award Winners

When implementing an effective employee of the month program, don’t forget to celebrate your winning employees by publishing the results of the program each month company wide. However, there’s no need to limit the effect of your organization’s incentive program to just your company. If you sponsor media programs via advertisements, have the host briefly mention the winner’s name and accomplishments on air in connection with the company. Your star employee will blush with embarrassed excitement over being recognized in such a public fashion, and prospective employees who listen to the program will be inspired to show off their skills at your company.


No business or worker stays the same forever and neither should your employee award program. Be sure that you’re getting an adequate return on investment by assessing the business outcomes of your program and making changes as needed.