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Potential Problems with Employee of the Month Programs, Kentucky Chamber Human Resource, August Newsletter 2013

Attorneys

Kentucky Chamber Human Resource, August 2013

Authored by Cynthia L. Effinger

Rewarding employees for a job well done is a smart business practice that can boost office morale. However, a bad "Employee of the Month" program ("EMP") is worse than no program at all, as recognition programs can be a liability trap for employers if not run fairly.

Lots of HR professionals question the effectiveness of EMPs altogether. A little competition can drive performance, but it can also create unnecessary hostility. And let's face it, most workers fall into one of three categories: the good, the average, and, the barely-making-the-cut. If a EMP is truly based on performance, then the "good" will always win, which will only dishearten the "average," and do nothing to encourage the "barely." But, then again, if the award is simply passed from one person to the next so as to not leave anyone out, is it really even a reward? What if no one performed particularly well in a given month? In that case, is giving an award encouraging mediocre performance?

Another common problem with EMPs is that often those who receive the honor do not understand what they did to earn it. Maybe it is for having the highest sales in a given month or maybe it is for a good deed, like offering a Lean Cuisine to a coworker who forgot their lunch. Without set criteria, the award is quite arbitrary, and in the workplace, arbitrary can often look like discrimination.

Consider this situation: Lisa has been working at X-Company for ten years and almost exclusively works with males. She has never once received the EMP award, while some of her male colleagues have received it numerous times. There is no criterion for the EMP award. Instead, the manager takes into consideration any given number of things each month and makes his own decision as to who should receive it. He has never purposely excluded Lisa from winning; he simply has never given her the award. The same manager considers EMP awards when making promotions; Lisa has not been promoted in years, despite her satisfactory work.

Lisa files a discrimination claim against X-Company and her manager, citing gender discrimination. She uses the EMP as an example of how she has been unfairly treated compared to her male counterparts.

Now, the EMP at Lisa's work may not intentionally discriminate, but without established and publicly-known criteria, it can be interpreted that way. To avoid this, employers should always explain what the EMP recognizes. Winning it should be an attainable goal for everyone. And the criteria should never make it difficult or impossible for those in a protected class, such as gender or race, to earn.

If you are going to stick with an EMP, consider what you are giving as the prize. Monetary rewards can drive extreme competition and feelings of jealousy. On the other hand, a marked parking space in a sea of ample parking spaces may make the award seem phony and not worth the effort. What would get your employees motivated? An extra hour for lunch? A temporarily increased employee discount?

The better practice for many businesses is to recognize employees right away for a job well done. Immediate reinforcement lets the employee know exactly what he has done to receive praise. It also makes the acknowledgment seem more genuine - as though management is really tuned into employees' performances and constantly monitoring their success. If someone goes above and beyond, do not hesitate to send a company-wide email or sing their praises at an upcoming meeting. Simple public recognition can go far; no plaque needed.

EMPs should be evaluated to determine if they are actually helping office morale and, more importantly, that they are not discriminatory in nature. In short, give credit where credit is due, but never do so in a way that only works to the advantage of a few.

Cynthia L. Effinger , an Associate of the firm, joined McBrayer, McGinnis, Leslie & Kirkland, PLLC in 2012. Ms. Effinger has a broad range of legal experience gained through 13 years of practice throughout the Commonwealth of Kentucky where her clients conduct business. Ms. Effinger's practice is concentrated in the areas of employment law and commercial litigation. She also has experience with First Amendment litigation, securities litigation and complex litigation. Ms. Effinger may be reached at (502) 327-5400, ext. 316 or ceffinger@mmlk.com .

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