Although they are popular motivational tools, "employee of the month" programs don't always improve employee morale. Just ask Dale Hageman, CEO of an employee leasing business in Oklahoma City that had 1998 revenues of $123 million. Hageman feels that his long-abandoned "employee of the month" program at Accord Human Resources wound up being "more negative than positive."

When managers selected honorees, Hageman says, some employees viewed the winners as teacher's pets. And when he attempted to involve peers in the selection process, many griped that the program felt like a popularity contest. "I thought it was very fair," he says. "But with these things, perception is reality." So Hageman scrapped the program, opting instead for a less formal procedure: Each month, managers select outstanding employees for verbal recognition at a companywide meeting.

Kurt Bleicken agrees that it pays to consider people's feelings when designing an "employee of the month" program. "You have to be careful how you do these things," says the president and CEO of GreenPages, a computer reseller in Kittery, Maine, that had 1998 revenues of $88 million. "They can be a real downer."

After living through numerous problematic incarnations, Bleicken thinks that he has found a system that works. As part of the monthly selection process, each of Bleicken's sales teams picks a support person of the month, while each of his support teams picks a salesperson of the month. Bleicken feels that the two-way voting procedure creates a mutually supportive atmosphere. "There is usually no dissension about who should have gotten what," he reports.