Replace Your Employee-of-the-Month Program

To build a great company, with great people, performance must be the basis for any recognition and rewards program, or it may backfire on you. At Schwab, managers were surprised to discover that employee-of-the-month programs were often counterproductive.

One problem was some managers felt obligated to honor all employees, which made the program worthless. Other managers honored their favorite employees, which led to resentment by everyone else.

Both approaches miss the point and hurt your company. Employees will compete to achieve a goal, and when they do, that achievement itself should be recognized first, then the person who accomplished it.

Leaders should be rewarding behaviors and results. That way, the employee, who must be measurably associated with those outcomes, becomes a good example of what other employees can do, too.

Jealousy is the result of focusing on personality instead of productivity. That’s why you should replace your employee-of-the-month program with an achievement-of-the-month prize.

People hate the former and love the latter, as long as you make clear to everyone what level of performance it was that led to the recognition or reward.

This article was written by Brian Tracy and published in Bloomberg Businessweek magazine.