Around 90% of companies in the U.S. formally recognize employee tenure in some form or fashion. The odds are excellent that your organization is one of them. The chances are also good that you have not reviewed the effectiveness and value of your current program in some time, and you may not be realizing the full potential of your service awards program. We’ll dive into the best practices for your employee years of service program.
A study conducted by the Society for Human Resource Management found that 79% of employees say recognition makes them work harder. These results do not happen in a vacuum. The initiatives that are in place at organizations have to be driven by upper management, managers, and supervisors. The resources below are pointers and suggestions to help your managers and supervisors and co-workers show appreciation and recognition to employees. Like most common corporate initiatives, there are best practices that are shared by organizations that are doing things the right way, and an employee service award program is no exception. A great employee service awards program is the gateway to help you in building a robust employee recognition foundation. From there, a more comprehensive enterprise-wide recognition strategy can be constructed or enhanced on this solid foundation. Here are ten best practices to implement or compare to your current program:
1. Allocate a meaningful budget to your employee service award program
2. Consider including early service recognition at 1-year and 3-year
3. Individual employee recognition and anniversary notifications should be timely
4. Involve senior leadership in the recognition experience
5. Personalize the recognition keeping in mind one size does not fit all
6. Provide gift reward choice
7. Present a user-friendly portal for gift selection
8. Integrate your corporate brand
9. Equip managers with the right tools
10. Build on the employee service award foundation
1. Allocate a Meaningful Budget to your Employee Service Award Program
Not allocating enough budget dollars to your employee recognition programs is a cardinal sin. Without the commitment of financial resources to any program, let alone an employee years of service program, demonstrates to your employees that they are not worth the commitment they have given to the organization. The absolute last thing you want to happen is for employees to feel insulted by inconsequential awards.
If it has been several years since you last reviewed the specific budget allocated to your employee service award program, then it is time to do it. There are two areas that you need to concentrate on when looking at your overall spend. The first is how many dollars you are allocating currently to each year of service. A typical budget amount is around $27 for each year of service. If you are well below this, then you should take a good hard look at the numbers and consider increasing the budget per year of service or abolish the program altogether. Remember, if you insult an employee, you will never gain their loyalty.
The second area to carefully scrutinize is the pricing model of your recognition program vendor, assuming you have outsourced this function. It is widespread for companies to be paying way too much for gifts associated with their recognition programs. Questions to ask: What are my employees getting for the dollars we are spending with our vendor? A significant expense is the shipping of gift items. Is shipping included in the cost of the gift, or is this a separate charge? What is the vendor’s markup on their gifts? Yes, you can ask this, and if they won’t tell you, it is time to look for a new vendor.
2. Consider Including Early Service Recognition at 1-year and 3-year Milestones
Traditionally, an employee service award milestone year would start with recognition at his or her 5 year anniversary. That was then, and this is now. Formal anniversary recognition should begin after your employees’ 1-year anniversary, and at an absolute minimum, their 3-year anniversary. Failure to implement an employee anniversary program before 5 years miss significant opportunities to include, engage, and retain younger workers according to a SHRM article.
The 5-year starting point for a service award program is just not in alignment with what the current tenure statistics show. The average tenure of a salaried employee is 4.2 years. For millenials things get worse. Employees 25–34 years old, the average drops to 2.3 years, according to the Bureau of Labor Statistics.
A modern employee service awards program needs to be advertised to new employees during the employee onboarding process. With a 1-year milestone implemented, it allows your new employees to see recognition happening all around them while knowing that they will be formally recognized in the short-term as well.
By building loyalty with employees earlier and more often, and hopefully in more ways than just an anniversary award, a foundation can be formed that will continue to build loyalty from your employees. The foundation is critically important, considering that Millennials make up 50% of the workforce, while their tenure is very low at 2.3 years. Failure to recognize younger employees during the early years of employment with your organization is a tremendous lost opportunity.
3. Individual Employee Recognition and Anniversary Notifications Should be Timely
The most significant impact to be had when delivering employee recognition to an individual is when that award is tied very closely to the actual date of the milestone. Ask yourself when was the last time I received a birthday cake three weeks after my birthday? It never happens! An employee’s “company birthday” is the day they started at your company. Not three weeks before or two months after.
To help managers with timely recognition of their employees, managers must be notified with ample time to prepare adequately for recognizing their employees’ service award anniversary. What does adequate preparation mean? Across the board, any employee recognition moment should follow a simple recipe, at a minimum, to help a manager prepare for the moment.
- Address the employee by name, and practice saying their name correctly before you are in the spotlight.
- Be specific about what the employee has accomplished to earn the reward, in this case, the number of years of loyalty the employee has given to you the manager, as well as the company.
- Illustrate how you feel about the employee’s milestone and how it has added value to your department and the overall organization.
- Summarize and thank the employee again by name. Addressing an employee, especially a direct report, by name and tying in the value his or her efforts have contributed to the company is often more motivating than the actual award.
4. Involve Senior Leader Leadership in the Recognition Experience
With direct managers and supervisors being involved in the day-to-day supervision of their employees, they have intimate knowledge of their employees’ abilities, strengths, and weaknesses.
A manager or supervisor knows their employee better than anyone and can tailor the award presentation most effectively to that employee. The more personal the presentation, the better, which also makes it more believable when coming from the direct manager.
To reinforce the importance of the milestone, it would behoove senior management to be present whenever possible for the award presentation and to be involved in a smaller way. This also sets a positive tone for all employees seeing that senior management took the time to be present. However, the physical presentation should come from the direct manager or supervisor.
5. Personalize the Recognition Keeping in Mind One Size Does Not Fit All
It’s human nature to want to be appreciated and recognized. Your employees need to be recognized and appreciated. While almost all people enjoy being recognized, not everyone enjoys being recognized similarly. Creating a public recognition event putting an employee in the deserved spotlight for their milestone moment is the right idea. It might be precisely what many people love, being the center of attention. For others, they’d rather have their wisdom teeth pulled than having the entire company or department looking at them.
If your organization is doing personalized, individual recognition, that is a great thing. Of course, the intention here is good. Still, if the manager or supervisor of the employee has not taken the time to consider how the recipient’s personality will play into how they will react to the attention, then the positive benefits of a public recognition event may fall short. Pay attention to your employee’s demeanor around the office and modify the award event accordingly to match their personality.
6. Provide Gift Reward Choice
A quality recognition program is much more than the gifted reward that your recognition recipients receive. A strong argument can be made that the gift is secondary to the milestone and the moment that your employee is being recognized for.
However, the momento of the occasion, the gift that provides the icing on the cake of the overall celebration is still very important. Your employees are regular people, and ordinary people or consumers are accustomed to choice in the 21st Century. Amazon did not grow to its size by offering limited consumer merchandise options, so your service award program better follow suit. When companies provide more gift choices, experiences, trips, concerts, and countless other items to employees, it is an affirmation that the company is current with the times and cares about all of its employee’s interests and desires.
By providing your employees the opportunity to pick out a gift from millions of choices, including brands they trust, you are giving them a choice that they want and what is most meaningful to them. After all, it is about them correct?
7. Present a User-friendly Portal for Gift Selection
Make the service award gift selection simple. The software in the employee recognition industry has improved drastically over the years. It is fair to say that most vendors in the industry have kept up with the user experience; however, not all have. Combine outdated technology with poor gift choice, and you destroy the gift selection experience. Also, make an effort to customize your portal in a way that reflects the company’s mission, guiding principles, and vision. This is an excellent opportunity to remind your employee what the organization stands for while making it about them.
Depending on the demographics of your workforce, and the possible lack of access to a computer, you may have to make accommodations for some of your employees to select their gifts. Keep in mind that any right software solution should be accessible via a pc, tablet, or smartphone. This should give the vast majority of your employees’ access to the gift ordering site. Ultimately, if there are one or two employees that need further assistance, their manager or human resources should be able to provide access to a pc for them to place their order.
8. Integrate your Corporate Brand
Integrating your corporate brand into your service award program is perfectly fine, as long as it takes a backseat and does not overshadow the employee you are recognizing. A toned-down representation of your corporate brand can include your mission, guiding principles, organizational goals, etc. in print materials that are given to the employees. Many of our customers integrate custom swag or a symbolic award such as a piece of crystal or a recognition pin as a gift item. Still, we recommend that the main gift item come from a vast catalog of gifts so that the employee can choose a gift that is most meaningful to them.
9. Equip Managers with the Right Tools
Without a commitment from your managers to learn how to properly recognize their employees, with some of the tips in this article, then getting the most benefit out of your years of service program is going to be a challenge. Remember, the whole experience is what is going to resonate with the employee for years to come. Equally as important, the employee’s peers will also be previewing what they will eventually go through if they haven’t already, and this can be a driver in changing behaviors. If “John” knows that he is not performing at a level like “Sally” who is being spoken about publicly, John may be thinking about upping his game before his next milestone year when he is on stage.
Implement employee recognition training programs for management and supervisors that will be involved in performing the actual act of recognizing their employees. Maybe there is adequate knowledge within your organization currently that can be tapped to help implement a training program on how to prepare and perform a formal recognition event. If not, there are many resources and consultants available for this function.
This will also be the time to educate managers on what is in this for them. Many studies prove when managers learn the appropriate and proven way to recognize their direct reports, the results are higher performing employees that produce better results. This, in turn, will ultimately reflect directly on them.
10. Build on the Employee Service Award Foundation
Developing or re-tooling your current service awards program into a best in class service awards program should be the foundation for developing a more comprehensive total recognition strategy. To be blunt, if you cannot master one of the easiest forms of recognition, an employee anniversary program, then it will be difficult, if not impossible, to move into manager-to-peer recognition, peer-to-peer recognition, or other behavioral-based employee recognition programs.
Start with your employee service award program. Make the changes required to make it world-class (regardless of the size of your company) and build from there.
Keeping your employees engaged has been proven effective for decades. This is why 9 out of 10 companies currently have a basic service award program. But that is not enough. Most adult Americans can say they have a car, but that doesn’t mean that car is shiny, smells good, has clean windows, and the engine runs smoothly. Yes, it can get you from point A to point B, but with a little work can get you to where you are going more comfortably and with a bit of style.
A great employee service awards program is an effective way to start creating a culture of recognition throughout your organization. For additional information on these best practices and for review of your current program to help you identify if you are getting the best in class service from your current vendor, reach out to CoreCentive for a no-pressure free service award consultation.