Abstract Background Arthroscopic glenohumeral debridement for symptom control has shown promising short term results in the young active population, when arthroplasty may not be a practical option due to the recommended activity restrictions, potential for complications and/or early wear, and a need for revision. The purpose of this study was twofold: 1) to examine the impact of arthroscopic debridement with or without subacromial decompression on clinical outcomes in patients with severe glenohumeral osteoarthritis (OA), and 2) to explore the differences in post-debridement outcomes between patients who eventually progressed to arthroplasty vs. those who did not. The role of an active worker’s compensation claim was examined. Methods Prospectively collected data of patients who were not good candidates for shoulder arthroplasty and had subsequently undergone arthroscopic shoulder debridement were used for analysis. Disability was measured using the relative Constant-Murley score (CMS), the American Shoulder and Elbow Surgeon’s (ASES) assessment form, pain free range of motion (ROM), and strength. Results Fifty-six patients were included in the final analysis. Eighteen (32 %) patients underwent arthroplasty surgery (arthroplasty group) over a period of 11 years. The arthroplasty group was comparable with the non-arthroplasty group prior to debridement but was more disabled at post-debridement surgery follow-up, functioning at less than 50 % of normal based on ASES, relative CMS, and active painfree ROM. In the multivariable analysis, the post-debridement relative CMS was affected by having a compensation claim and having a future arthroplasty. Conclusion Arthroscopic debridement improved clinical outcome in 68 % of patients suffering from advanced OA of glenohumeral joint. Having less than 50 % of normal score in ASES, relative CMS and painfree ROM post- debridement within a period of two years may be an indication for future arthroplasty. Role of worker’s compensation claims should not be underestimated.