Employee of the Month Program: An Honest Guide
How to run an employee of the month program, what the research says about whether it works, fair criteria, small-team math, and better alternatives.
Employee of the Month Program
What the research actually says about whether it works, and how to run one that does not backfire on a small team
Almost every guide to this topic tells you how to run the program and skips whether you should. That is a strange omission, because the peer-reviewed research on the classic single-winner monthly format is genuinely unflattering, and the arithmetic on a small team is worse than most owners realize.
This guide covers both questions: what the evidence says, why the standard format struggles on a small team, and, if you still want one, how to design it so it does not do more harm than good.
Recognition works, and there is strong evidence for that. The specific mechanic of crowning one winner per month while everyone else loses is the weakest available way to deliver it.
I wrote this guide for a founder or owner running a program without an HR department, at a company where you know everyone by name and a badly handled award will be noticed by all of them. I build FirstHR for exactly that size.
What Is an Employee of the Month Program?
An employee of the month program is a recognition scheme in which one employee is publicly singled out each month for outstanding contribution, usually against employer-set criteria and often with a small reward attached.
The last sentence matters more than it looks. A program is not a strategy, and running one does not mean your people feel recognized.
Does It Actually Work?
Not in its classic form, where one person wins each month: the available evidence on that format points the other way. Recognition in general does work, and because the two usually get conflated, the honest answer starts by keeping them apart.
Start with recognition itself, which has strong evidence behind it. Per Gallup research, which tracked nearly 3,500 employees from 2022 to 2024, well-recognized employees were 45 percent less likely to have turned over after two years.
The same research found that more than half of US employees either receive no recognition at all or receive recognition that satisfies none of the criteria Gallup uses for high-quality recognition. That gap is the cheap opportunity, and closing it does not require running a formal program.
The single-winner monthly format specifically has evidence against it. Johnson and Dickinson, publishing in the Journal of Organizational Behavior Management in 2010, ran two controlled experiments in which participants competed against fabricated team members for a weekly award, with the second experiment adding a $50 bonus for the winner.
The study design is what makes the result worth reading. Participants were always placed between second and fifth, so the study measured the unrewarded runner-up, and the authors concluded that employee-of-the-month programs do not sustain improved performance and may even have detrimental effects.
The study has limits worth stating honestly. It used an experimental data-entry task rather than a field study of real workplaces, and one paper does not settle a question. But it is independent peer-reviewed research, it points somewhere most vendor content never acknowledges, and the mechanism it identifies is intuitive enough to take seriously.
The Small Team Problem
The structural issue with a monthly single-winner award gets worse, not better, as the team gets smaller, which is the opposite of what most people assume.
Two things follow from that table. First, on a six-person team the program produces five losers every month, and those five all know each other and sat in the same room when the winner was announced. At an enterprise the same award is a pleasant abstraction; on a team of six it is a monthly public ranking of a small group of colleagues.
Second, on a small team you will eventually run out of genuine winners. With twelve people and twelve months, by month seven you are choosing someone because they have not had a turn. Everyone notices. The award becomes a rotation, and a rotation communicates that recognition here is an administrative schedule rather than a response to anything you did.
When It Does Work
The format is not universally bad. It works better under specific conditions, and it is worth checking whether yours match.
In short: if you run a mid-size team doing comparable work in a high-turnover environment, the classic format is defensible. If you run a small team where everyone does a different job, it is the wrong instrument and something else will serve you better.
Choosing Fair Criteria
If you are running one, criteria are what separate a program that builds trust from one that erodes it. They should be specific, observable, and published before the first award.
The two criteria marked Avoid deserve an explanation. Attendance-based criteria systematically disadvantage employees with caregiving responsibilities, disabilities, or protected medical leave, which is unfair and can expose you to a discrimination claim. Longest hours rewards presence over contribution, and the person who finished the same work in less time is penalized for being better at it.
Two federal rules limit that risk. The first is a Family and Medical Leave Act (FMLA) regulation, 29 CFR 825.215(c)(2): a perfect-attendance award may be withheld for an FMLA absence only if employees on equivalent non-FMLA leave are treated the same way.
The second comes from the Equal Employment Opportunity Commission (EEOC). Its guidance on employer-provided leave and the ADA (the Americans with Disabilities Act) adds that a uniform attendance policy may still have to be modified as a reasonable accommodation, the ADA term for an adjustment an employer makes for an employee with a disability.
The test for any criterion: could an employee read it and know what they would need to do differently? If not, it is a sentiment rather than a criterion, and a program built on sentiments is one where people conclude the decision was made on other grounds.
Avoiding Favoritism
Favoritism does not have to be real to damage a program. If it looks like favoritism, it functions like favoritism, and at a small company perception forms fast.
The fourth check is the one people miss. Visible roles generate stories and invisible roles do not, whatever each one contributes. Sales closes a deal in front of everyone; the person who prevented a problem produced no event at all. Any program that relies on someone noticing will systematically favor the first kind of work unless you deliberately correct for it.
Tracking winners over time is the cheapest safeguard available. A spreadsheet with names and dates takes seconds to maintain and immediately reveals whether the program is recognizing contribution or recognizing proximity to the person deciding.
| A | B | C | D | E | F | G | H | I | J | K | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Award period | Date awarded | Winner | Role | Role type | Criterion met | Reason stated publicly | Nominated by | Deciders | Reward given | Through payroll? |
| 2 | SAMPLE January | SAMPLE M. Chen | Service lead | Customer facing | Helping others | Covered two routes on the day the van broke down | Peer, two people | Owner and ops lead | Extra paid day off | N/A | |
| 3 | SAMPLE February | No award this round, nobody stood out | Owner and ops lead | None | N/A | ||||||
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The second tab is the part worth running every six months. Each check is a count you can do in a minute, and each one answers a question you cannot answer by remembering.
How to Start the Program
If you have read the caveats and still want one, these eight steps set it up to survive contact with a real team. The order matters: decide what the program is for before anything else, and fix the review date before you launch.
Steps three through six are one document. Write the terms down, publish them, and use the same form for every nomination so that the decision has something behind it.
Employee of the Month Nomination Examples
A nomination is only worth reading when it names one event. Below are four written the way people actually submit them, each next to a version that gives the deciders something to weigh. The difference is a date, an action, and what would have gone wrong otherwise.
| The nomination people write | The version the deciders can act on |
|---|---|
| Sam is always helpful and has a great attitude. | On the 12th Sam took the afternoon route when the van broke down and finished his own deliveries afterward. Three customers who would have been missed got their orders that day. |
| Priya works incredibly hard and deserves it. | After the third duplicate order in a month, Priya rebuilt the intake checklist on her own initiative. We have not had a duplicate since. |
| Marcus is the best person on the team. | Marcus spent two afternoons teaching Dana the returns process rather than doing it for her, and Dana has handled every return since without asking anyone. |
| Great customer service all month. | A customer called on the 20th about a missed install. Rosa stayed on the line, rebooked it for the next morning, and called back the following day to confirm it had happened. |
The right-hand column is also your announcement and the line on the certificate, so a good nomination saves you writing them twice. If nobody can produce a sentence in that shape this round, you have your answer about whether there is a winner.
Reward Ideas by Budget
The ideas below are grouped by what they cost, because budget is the binding constraint at a small business. The no-cost options are not consolation prizes; some of them work better than the paid ones.
The pattern in what people actually value: time and autonomy beat objects, and specificity beats generosity. A $20 gift card to a place they mentioned liking lands better than a $50 generic one, because the first shows you were paying attention and the second shows you had a budget line.
One administrative point trips up small employers: cash and gift cards given to employees are generally taxable wages rather than tax-free gifts, and belong in payroll with withholding applied.
The IRS is explicit about it. Publication 15-B states that cash and cash equivalent fringe benefits, gift cards and gift certificates included, are never excludable as a de minimis benefit (the category for perks so small that accounting for them would be impractical) no matter how small. The separate exclusion for employee achievement awards does not apply to cash, gift cards, or gift certificates either.
The Certificate and the Board
The certificate and the wall display are the container, not the recognition. What makes either one work is a single sentence naming what the person actually did, and both are close to worthless without it.
Employee of the Month Certificate Template
Most certificates fail in the same place: the line under the name says outstanding contribution and nothing else. Whoever reads it learns that somebody won, not what they did, which is the part that makes recognition land. This one forces the sentence.
Fill the For line before you fill the name, and check it against the criterion you published. If you cannot write that sentence, you do not have a winner this round, and the certificate is telling you so before the team does.
Employee of the Month Board Ideas
A board is worth having only if it stays current and carries reasons rather than faces. Six things belong on it, and the failure modes are as predictable as the contents.
| On the board | What it does | The failure mode |
|---|---|---|
| The name and a photo | Makes the award visible to anyone who missed the announcement | A face with no reason under it, which reads as a popularity result |
| One sentence on what they did | This is the recognition; everything else is framing | Wording like exceptional performance, which tells the team nothing |
| The award period, written on it | A dated board shows you it has gone stale before the team says so | An undated board still showing a winner from four months ago |
| The last several winners, not only the current one | Puts a range of names and roles on the wall instead of one face at a time | A single slot that erases the history the program exists to build |
| The published criteria, on the same wall | Lets anyone check the decision against the standard it was made on | Criteria that live in a document nobody has opened since launch |
| Nominations that did not win | Recognizes several people for the cost of the pins holding them up | Keeping runners-up private, which wastes every nomination you collected |
Put it where the team walks rather than only where customers do, since the audience that matters is the team the award recognizes. If your people are remote or spread across sites, the board is a pinned channel post or a standing slide in the monthly meeting, updated on the same date every round.
Formats That Work Better
Five formats keep what is good about the idea while removing the structural problem. All five work at any team size, and most cost less than the original.
Award Ideas That Reach More Than One Person
The first format above, multiple simultaneous awards, needs categories to work, so here are six award ideas that split contribution into things people can be recognized for separately. Each one describes a kind of work rather than a ranking, which is what lets several of them run in the same round.
| Award | What it recognizes | Why it earns a category of its own |
|---|---|---|
| Above and Beyond | One specific act clearly outside the job description | Keeps a single overall award from being the only route to being noticed |
| Behind the Scenes | Work that prevented a problem or kept something running | Reaches the roles that generate no stories and never win on visibility |
| Customer Save | A named customer situation that was turned around | Gives customer-facing staff their own lane instead of dominating a general award |
| Best Assist | Helping a colleague finish something that was not your job | Rewards the cooperation a single-winner contest quietly discourages |
| Fix of the Round | A process, tool, or habit somebody improved unasked | Recognizes initiative that produced no visible event on the day |
| Strong Start | A first few months that went noticeably well | Opens the program to people who cannot compete on a full year of results |
Four awards on a twelve-person team means a third of the room is recognized in a round, and the arithmetic that breaks the single-winner version stops applying. Pick three or four, publish them with the same discipline as the main criteria, and retire any category nobody has ever won on.
The last of the five formats, continuous small recognition, deserves emphasis because it is the cheapest. Gallup recommends recognition every seven days, and a monthly award is by definition infrequent and, for most recipients, delayed by weeks from whatever it is recognizing.
A channel where anyone can thank anyone in the moment delivers more recognition to more people at essentially zero cost, and it does not require anyone to lose. None of this means you cannot have a formal award; it means the formal award should sit on top of continuous recognition rather than substituting for it.
Common Mistakes
Each of the six mistakes below happens for an understandable reason, and each has a straightforward fix.
| Mistake | Why it happens | What to do instead |
|---|---|---|
| Unpublished criteria | It feels easier to keep the decision flexible | Publish three to five specific criteria before the first award; flexibility reads as arbitrariness |
| Manager decides alone | It is the fastest route and nobody objects at first | Peer nomination with at least two decision-makers, so the outcome is not one person's opinion |
| Rotating through the team | Monthly cadence forces a winner even when nobody stood out | Move to quarterly, or allow a month with no award rather than manufacturing one |
| Rewarding visibility | Customer-facing work generates stories and back-office work does not | Deliberately look for contributions that produced no event, and ask peers who helped them |
| A generic reward | A plaque is easy and requires no thought | Ask what people want; time off and specific personal gestures outperform objects consistently |
| Never reviewing it | The program becomes furniture and nobody wants to be the one to question it | Set a review date at launch and honestly assess whether it is doing what you wanted |
The third row is the most common failure and the most damaging, because a rotation is worse than nothing: it teaches people that recognition here is unrelated to what they do. If you cannot identify a genuine winner in a given month, skipping that month is a better signal than inventing one.
Quick Self-Check
Run through these six questions before you launch a program or decide to keep one going.
None of this requires an HR department or a recognition platform. It requires published criteria, more than one decider, and honesty about whether the format fits the team you actually have.
Frequently Asked Questions
What is an employee of the month program?
An employee of the month program is a recognition practice that picks one person each month and honors them publicly for outstanding work, typically judged against criteria the employer sets and often paired with a small reward. You see it most in retail, hospitality, and service businesses, because shift-based teams make the comparison feel simple. Management usually makes the pick, sometimes with input from peers, and the announcement is the part everyone sees: the name read out at a meeting, a certificate, a photo on the wall. It is best understood as a single tool inside a wider approach to employee recognition, not a strategy by itself. Having the award in place does not mean your staff feel recognized, and the research supporting the single-winner monthly format is much thinner than the research supporting recognition in general.
Do employee of the month programs actually work?
Not in the classic single-winner form, on the peer-reviewed evidence available. In 2010, Johnson and Dickinson reported two controlled experiments in the Journal of Organizational Behavior Management. Each participant did a data entry task and was pitted against fictitious teammates for a weekly title, and in the second experiment the title also came with a $50 bonus. Every participant was ranked somewhere from second to fifth, so the results describe the person who tried and went unrewarded rather than the winner. The authors concluded that employee-of-the-month programs do not produce lasting performance gains and may even do harm. It is a single laboratory study, not an observation of a real workplace, so it does not settle the question. Recognition in general has far stronger support, which makes the useful line the one between recognition, which works, and this particular mechanic, where the evidence points the other way.
Is employee of the month a good idea for a small business?
It depends entirely on the design, and the standard format is a poor fit for a small team. The problem is arithmetic. A monthly single-winner award on a six-person team leaves five people without it every month, and the average person wins roughly twice a year, so nearly everyone experiences most months as a loss. Those five are close colleagues who were all present when the winner was named, which makes the award feel like a public scoreboard for a handful of people. Small teams also run short of genuine winners: by the seventh or eighth month the pick tends to go to whoever has not won yet, and that is obvious to everyone. Multiple simultaneous awards, peer nomination, or a quarterly cadence all keep the visible ritual while removing the zero-sum structure that causes the damage.
What are good criteria for employee of the month?
Good criteria are concrete, observable, and shared with the team before the first winner is named. Strong ones include quality of work measured against a written standard, reliability in meeting commitments and covering shifts, helping a colleague in a specific named instance, initiative in solving a problem nobody asked about, and demonstrable customer impact. To test a criterion, ask whether someone reading it would know what to change in their own work; one that fails that test is really just a sentiment. Two criteria are worth avoiding outright. Attendance rewards presence and disadvantages caregivers, employees with disabilities, and anyone on protected leave, and both the FMLA regulations and EEOC guidance on the ADA limit how far an employer can push it. Longest hours rewards being in the building, and penalizes the person who did the same work faster.
How do you choose employee of the month fairly?
You choose fairly by fixing the rules before anyone is chosen: publish the criteria in advance, use peer nominations that require a specific example rather than a general endorsement, and have more than one person decide. Published criteria give the team a standard to check the decision against, a named event turns a popularity vote into a judgment about work, and a second decider keeps the result from resting on one person’s view. Announce the reason along with the name, describing what the winner did rather than calling them great, because a stated reason can be checked and a vague one invites the guess that the decision was made on other grounds. Then track who has won over time in a simple log and review it every six months. When the same two names keep coming up, the award is tracking who gets noticed, not who contributes most. Watch particularly for bias toward customer-facing roles, which naturally generate stories, over back-office work that is equally valuable but less visible. And allow a round to go unawarded when nobody stands out, since a manufactured winner makes the whole program look arbitrary.
What should the employee of the month reward be?
Something the recipient actually wants, which is usually not a certificate. At no cost, a public thank-you that names what was done, first pick of shifts for a month, or the chance to choose the next team activity all carry more weight than a plaque. Under $50, a gift card for a place the person really uses outperforms a larger generic one, because it proves you noticed what they like rather than just spending a budget. Above that, an extra paid day off costs coverage rather than cash. Watch the tax side, which small employers often miss: IRS Publication 15-B says cash and cash equivalents, gift cards and gift certificates included, are never excludable as de minimis benefits. That makes them taxable wages, so they go through payroll and have tax withheld.
How often should you give employee of the month?
Monthly is the default and is often too frequent for a small business. A fixed monthly slot means someone has to be named even in a month when nobody did anything exceptional, and once that happens the award turns into a rotation that the whole team can see and that says nothing about performance. A quarterly award leaves enough time for each one to rest on real substance, and skipping a round is easier to explain. Whatever cadence you choose, state in the published terms that a round can go unawarded when nobody stands out; a program that has never once skipped is almost certainly manufacturing winners. The formal award is only part of the picture. Recognition given close to the event, outside any ceremony, reaches far more people, and Gallup advises recognition every seven days, a pace no monthly award can match by itself.
What are the alternatives to employee of the month?
Several formats keep the upside and drop the zero-sum structure. You can give multiple awards in the same round, each for a different kind of contribution, for example one for work that headed off a problem and one for helping a colleague. You can open nominations to everyone and require each one to describe a specific event, so the manager is no longer the only judge. You can switch to a quarterly cadence, which gives each award more substance. You can honor a specific act instead of naming a best employee, which avoids implying that everyone else fell short. Or you can run an always-open recognition channel with no ceremony and no cap: it costs nothing, it reaches the most people, and nobody has to lose for someone else to be thanked. A formal award can sit on top of continuous recognition, but it should never substitute for it.
Does employee recognition reduce turnover?
Yes, the evidence linking recognition in general to lower turnover is strong. Gallup followed nearly 3,500 employees from 2022 to 2024 and found that those who were well recognized were 45 percent less likely to have left their jobs two years on. In the 2024 data, employees whose recognition met at least four of the five pillars Gallup uses to define high-quality recognition were 65 percent less likely to be actively looking or watching for another job than those receiving lower-quality recognition. The same research also revealed a wide gap: more than half of US employees get no recognition at all, or get recognition that meets none of those pillars, and just 22 percent of employees say they get the right amount. That suggests the real opportunity lies less in launching a program and more in recognizing people well. Keep the distinction this guide draws throughout: the evidence supports recognition, not the single-winner monthly award in particular, which Johnson and Dickinson (2010) concluded does not sustain improved performance and may even have detrimental effects.
How do you end an employee of the month program?
Say plainly that you are changing it and why, then replace it rather than simply stopping. Quietly discontinuing a program signals that recognition was never a priority, and the silence gets read as a verdict on everyone who won. Announcing that you are moving to a format where more people can be recognized reads as an upgrade instead, particularly if you are honest that the single-winner structure was not serving the team. Frame the change in terms of what the new approach does better, name the date it takes effect, and have the replacement running before the old one ends. If the program had a published review date, use it: a change made on a schedule you announced in advance looks deliberate, while one made without it looks like a reaction.
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