How many times have you met up with somebody that you know and no matter how hard you try you can't come up with their name? Now imagine how that feels for the person with Alzheimer's or dementia.
For you it's generally a passing moment but for the person with dementia the name never comes. Now imagine how good that person would feel if they could "remember" your name, even if it was because they read it on your name tag. I have seen the look of joy on the person's face as they are able to greet me with a friendly "Hi Donna" instead of a generic, impersonal greeting (or no greeting at all). It's a simple thing but makes the person proud and helps make a better connection between me and the person.
I am not a "name" person by nature and when I first started working with dementia clients I never wore a name tag (or at least not in an easily visible place) and never saw the need. What difference could it make if the person read my name on a tag or not? Well, over the years (and prompted by my Montessori training) I have come to realize that it does make a big difference. It makes people comfortable and more trusting if they know your name. It puts them on the "inside". This helps establish a rapport and makes it easier to help them engage in meaningful activity.
In order to be most effective, the name tag should have large, bold letters so that it is easy to read and it should be worn in a way that it is always easily visible. It should have no designs, pictures or other distractions on it so that the person can immediately focus on the name and not be distracted by anything else.
It's a simple thing but it really does make a difference. Try it and see for yourself.