A fair and competitive market environment and the rational allocation of elements are an important starting point for unblocking the “domestic cycle” and one of the main goals of China’s “14th Five-Year Plan”. In recent years, the increasing variety of government awards has an impact on the efficiency of resource allocation, but there is little literature on this issue. This paper takes government quality awards as an example to study the impact of government awards on enterprises and explored possible impact mechanisms. Based on the data from the 2018 China Employer-Employee Survey(CEES), the empirical result of this paper shows that awards have a significant positive effect on the productivity of enterprises. This effect can be explained by the improvement of enterprises credit conditions, the increase in production capacity and innovation input. Entrepreneur human capital, political relations and other preferential policies also have a significant impact on this effect. Further inspections find that the award has a significant negative effect on the profitability of the enterprise. Therefore, government-organized awards can indeed help enterprises obtain more resources in terms of credit, subsidies, and innovation, but their net effect on productivity is not significant, and it has a negative effect on profitability. This shows that the awards may cause various resources to flow to less efficient companies, thereby causing distortions in resource allocation.