The days of being honoured for simply doing the day job are over according to a committee of MPs.
They say that awards such as an MBE and OBE are too often given to celebrities and senior civil servants rather than people who volunteer in their local community.
A new report recommends reform of the system to boost transparency and accountability.
It says that an independent honours committee should be set up to consider nominations and that Prime Ministerial influence should be reduced.
Bernard Jenkin MP, who chaired the committee considering reform of the honours system, said: "There should be no automatic honours for people who hold a certain post or for celebrities and sports stars at a certain level - but too often it seems this is still the case.
"While the honours system is a valued and popular part of British life, the fact that so few people understand how or why honours are awarded does nothing to help bolster public confidence."
One of Britain's most celebrated and decorated sports stars is Sir Jackie Stewart OBE.
He told Sky News: "I think sports men and sports women should be given honours at the appropriate time.
"I don't think to be perfectly honest with you it necessarily should be on one world championship or one gold medal.
"Many people have waited a long time to get knighted for example. Stirling Moss got knighted when he was in his late 70s, and had achieved a great deal for Great Britain.
"I think you've got to earn, whether it's an MBE, OBE, CBE, knighthood or whatever else, and I don't think it can necessarily be at your peak as a sports person.
"I think it has to be a deeper well that you have to dig for to do something for the country, beyond for yourself."
Voluntary worker June Kelley runs a football team for youngsters in a deprived inner-city suburb of Manchester and was awarded an MBE in the 2010 New Year's Honours.
She says she was delighted to receive recognition for her 45 hours per week unpaid work, but believes that not enough people like her are recognised.
"For every celebrity that gets one or business person a local grassroots person, not necessarily just in sport but in general, it could be a nurse, doctor...people doing good in society, that they should equally be awarded and publicly to be shown to have got one," she says.
The Public Administration Select Committee recommends:
:: That the Prime Minister's "strategic direction" over the honours system should be removed
:: A rebalancing of the proportion of honours awarded to civil servants and public sector workers and local community volunteers
:: More explanation of the reason for awarding an honour.