Here we are, two weeks on from the Oscars. The stars have strolled across the red carpet, held their breath while someone said ‘and the winner is…’ and duly thanked the director, the cast, the crew – and hopefully their mum and dad as well.  

More significantly though, we’re six days on from the end of the month – a time when ‘and the winner is’ was slightly closer to home; when businesses up and down the land announced their Employee of the Month.

And there’s Jessica: she’s clutching a bouquet, a voucher for a local restaurant and the rest of the team are clapping – some with slightly more enthusiasm than others. The question is, does it make any difference? Will Jessica’s performance next month be significantly better because she’s the winner – and will it motivate or de-motivate the rest of the team?

At this stage I need to pin my colours to the mast. At Castle we do have an Employee of the Month – and of the Year. We have several other awards as well – and I’m absolutely convinced that they work.

And yet there’s a body of research that suggests awards to your staff don’t work: that not only do they de-motivate significant numbers of employees, they might even lead to a lessening of performance from the winners in subsequent months. I was surprised when I read these articles: the most striking one was a study of an American laundry chain carried out by an assistant professor at Harvard and a professor from the Business School at Washington University.

I read the article twice – and then I compared it to our experience at Castle. The result is five recommendations that I hope will help you develop and implement effective awards for your team – and avoid some of the worst mistakes.

• Don’t reward the basics. The laundry chain in the study offered a reward simply for doing the most basic of all basics: turning up for work. No wonder employees who habitually had good attendance records became de-motivated when they saw previously less consistent colleagues suddenly walking off with awards. If you have an award it needs to be won, not awarded by default – and it needs to be won for outstanding performance, not for simply turning up on time and clocking-in.
• Don’t have awards that involve an element of chance. If you consistently turned up on time at the laundry, then you were entered into a draw ‘for the chance to win…’ To quote the witches in Macbeth, ‘nay, nay and thrice nay.’ If you’ve done something that deserves recognition then it deserves recognition. Not the chance to be entered into a draw where you may be lucky or unlucky. If you want to guarantee de-motivation, watch what happens when someone who’s done the basics for a month gets lucky in the draw.
• Don’t have awards that let people play the system. What happened at the laundry? Once an employee’s chance of winning the award had gone they lost interest – and in several cases their rate of absenteeism went up. If there’s any chance to ‘play the system’ someone will do it – and the rest of your team will notice and react accordingly.
• Do recognise what’s important to people – and very often this isn’t money. At Castle we have a variety of incentives, and one of the most popular is ‘me time’ – or Golden Hours to give it the official title. Anyone in the team who reaches a specific target gets extra time off – and I absolutely encourage them to spend that extra time on themselves. No ‘just catching up on jobs at home’ – I want to see them doing something special.
• And finally, do announce the awards with a fanfare. No sidling up to someone’s desk and saying, ‘Just between ourselves, you’re the Employee of the Month.’ Every study I’ve read shows that the recognition is far more important than the actual award. Whether it’s the Oscars or the sales figures, it’s the recognition by your peers that really counts.

I hope those suggestions help. I think awards are important, I think they can help build your team – and I firmly believe that ultimately they can improve your bottom line as well.