The old saying that the road to hell is paved with good intentions is very true when picking an employee of the month. This program, conceived in the HR department, sounds like a great path to solve the problem of making sure the employees feel appreciated. Picking the best employee go-getter gives each person a chance to get money, kudos, a boost to their ego, as well as possibly a boost in their work effort. What could go wrong?
Picking The Employee
The first problem is how to pick the employee. If it is done with subjective criteria (manager recommendation, other employees recommendation, customer comments, etc.) the odds of picking the most liked employee is very high and others that are not glad-handers may never get picked. But, as we see in the Oscar awards, it isn’t long before people start lobbying for these prizes. I have seen more time spent talking to other employees and basically focusing their day on trying to get that prize than getting actual work done.
No matter how good the selection is, other employees will feel cheated because it is still done on a subjective basis. You will probably have some employees repeat their wins and others never getting picked.
No problem. Make the selection objective by certain criteria (sales, customers helped, designs completed, etc.), and most of the problems of subjective selection disappear. Of course, that just opens up additional issues.
Employees will manipulate the criteria to make sure their numbers are at the top and ensure they get selected. This could include delaying sales contracts into one month, blowing through customer assistance sessions on the phone to push the count higher, and creating extra documents just to give a feeling of high productivity.
Selection of Just One Employee
Employee of the month implies that only one employee can be selected for the honor. What happens if you have multiple employees who 
deserve employee of the month? Give the honor to several employees in one month and the feeling of being special disappears. Not to mention how much it will cost to give the same prize of cash, trips, or other goodies to multiple employees.
The other tendency of wanting to give the honor to an employee because they have not got it yet. Regardless whether they deserve it or not. The moment you do that, the employee of the month program is in tatters. Gone. Kaput.
How to Honor Employees
If you don’t have any employee appreciation programs in place, you can start out with a simple and free program. So simple you may dismiss it.
Catch employees doing something right and bring it up in meetings and other discussions. I am blown away how far verbal appreciation goes with employees. It will motivate them. It will drive others to perform better so they can get the appreciation.
The one danger is that some employees will focus on doing something spectacular in front of their supervisor just to get the verbal kudos. This can be solved by just being aware of what everyone is doing. The introverted employees may not be so visible in their work so a manager may need to be extra observant for these team members.
Catch your employees doing excellent work, make sure everyone knows about it, and you will have spectacular results!