10. Employee Engagement -Participation

Why Prizes Won’t Motivate Employees (and What to Do About It)

Jan. 18, 2019
Handing out recognition may boost morale, but it won't improve performance.

A few years ago, I was helping a client implement lean methods and concepts.  We started the initiative with workplace organization. Progress was good, and the client was interested in ideas that would help sustain the effort.  Company leaders came up with the idea of giving a “Golden Broom Award” to the department that kept its area best organized and cleanest during the month.  They asked what I thought about the idea.

Lots of organizations have the idea that giving prizes and awards somehow motivates employees. I’m not opposed to handing out prizes, but I don’t think they actually do much to motivate higher performance across the workforce—and, in fact, can backfire badly. 

The idea behind awards is that employees should be recognized in some way for exemplary performance.  Certainly, one can’t argue with that. But why recognize just one employee or one department each month for good performance?  Doesn’t the organization, when it gives prizes to just a few, then do a disservice to all the employees who worked well and did what was asked (and often more) to pursue the organization’s goals? 

The “prizes and awards” approach to motivation has several serious flaws.  First, they are difficult to design and administer.  At my first job at a coal company in eastern Kentucky, managers decided to give a company jacket to any miner who had perfect work attendance during the year. The “company jacket for perfect attendance” program fell apart when a miner at one of the company’s operations didn’t get a jacket, even though the only days he missed all year were bereavement days for a close family member.  When he didn’t receive a jacket, all the miners who did laid their awards at the doorway of the superintendent; most had notes attached with graphic suggestions as to what he could do with the jackets. A program that was intended to recognize performance and improve morale had exactly the opposite impact. 

Second, too often they become “check the box” chores for management rather than real efforts to recognize good performance.  Back when I worked for a national hotel firm, the property in Cleveland gave an “Employee of the Month” award. The hotel managers groaned each month when the need arose to choose another “Employee of the Month.”  Generally, the award went to an employee who hadn’t previously received it.  Employees learned that they weren’t actually being recognized for exemplary performance; rather, that it was simply “their turn to get it”. 

Third, and perhaps most important, there’s little evidence that such awards actually motivate employees to improve their performance. 

So, what does work to motivate employees?  Several years after the “perfect attendance jacket” fiasco, the same mine shut down for a few months.  Just prior to “start-up”, the mine’s superintendent was persuaded to communicate his plans for re-opening the mine and to get input from the miners.  The sessions generated a number of suggestions from the workers as to how the mine could be reactivated quickly and safely.  Several months later, production data showed that the mine had the quickest return to pre-shutdown production levels in the company’s history. 

In spite of the “Employee of the Month” program, the hotel had chronic issues with service to guests and customers.  In fact, guest satisfaction ranked near the bottom of all the company’s properties. 

In their quest to improve, the company started a total quality management initiative that utilized employee teams to identify and resolve customer service problems.  As part of that initiative, guest services departments receive unfiltered guest satisfaction data that, previously, had been only for managers to lay eyes on.

Two years later, the hotel had moved from 40th to 25th overall in the company with respect to guest satisfaction.  It had moved to the top of the “Downtown Business Hotels” category. 

What did these initiatives have in common?  First and foremost, the organizations got employees directly involved in improvement discussions.  Second, they provided employees the opportunity to put their improvement ideas into action. Third, they measured results and provided that data to employees. 

The lesson is that, while external motivators (e.g., awards and prizes) can sometimes lead to increased employee satisfaction (but only sometimes), internal motivators are more likely to drive real improvements in performance.  Such internal motivators include the opportunity to solve problems and provide improvement ideas, then to participate in the implementation of the solutions and improvements.  They also include the ability to make decisions and plans in response to performance data.  Finally, they include giving responsibility for the effectiveness of ideas and solutions to those who developed them.

Does this mean that companies should get rid of Employee of the Month awards and to refrain from implementing Golden Broom awards?  Of course not.  As mentioned earlier, administered correctly, such awards can be associated with good morale (at least on the part of those employees who actually receive the prizes).  But don’t, for a moment, believe that they’ll drive real performance improvements.  That will come when you truly engage employees in creating success for the enterprise.

About the Author

Rick Bohan | Principal

Rick Bohan, principal, Chagrin River Consulting LLC, has more than 25 years of experience in designing and implementing performance improvement initiatives in a variety of industrial and service sectors.

Bohan has a bachelor of arts in psychology from the University of North Carolina at Chapel Hill and a master of science in organizational development from Case Western Reserve University in Cleveland. He has published articles in National Productivity Review, Quality Progress and ASTD's Training and Development Journal. He is also co-author of People Make the Difference, Prescriptions and Profiles for High Performance. Bohan can be reached at [email protected].

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