Do employee-of-the-month programs work?
No. In fact they might make things worse:
This article investigates Employee-of-the-Month as a technique for sustaining improved performance on a data entry task in two experiments. In both experiments, participants competed as members of a fabricated team for a “Check Processor of the Week” incentive. The first experiment assessed the impact of receiving this incentive. In the second experiment, the incentive was enhanced to include a $50 bonus for the winner. Participants always placed between 2nd and 5th place in order to assess the impact of being an unrewarded runner-up. Overall, results suggest that Employee-of-the-Month programs do not sustain improved performance and may even have detrimental effects.
Source: “Employee-of-the-Month Programs: Do They Really Work?” from Journal of Organizational Behavior Management, Volume 30, Issue 4 October 2010 , pages 308 – 324