6 Best Practices for Service Awards Programs

80% of organizations today have a service awards program in place.  If your oganization is a start-up and beginning to explore a service awards program, here are some tips to help you get started.  And if you’ve had a service awards program in place for many years, these guidelines may offer new ideas for keeping your program fresh!  Of course, Terryberry can walk you through these steps and make sure you are set up for success.

1. Celebrate early milestones as well as long-term service

In days of old, an employee might receive her first service award after 5 years, sometimes even 10 years.  Nowadays of course we know the average tenure of a salaried employee is 4.2 years.  For employees aged 25-34, average tenure is 2.8 years.  These stats render the 5 year starting milestone obsolete.  Today’s service awards programs often start after the first year.   At Terryberry we recommend the milestone map shown here.

Begin careers on a positive note with a small Welcome Aboard award. The next formal award should be presentated at the employee’s 1 year anniversary, then 3 years, then 5 years, and every 5 year interval thereafter.  Tangible awards should be presented at these significant milestones, but don’t neglect the “in-between” anniversaries.  A verbal “thank you” or an ecard on an employee’s 4 year anniversary costs nothing and will go a long way in building goodwill.
For organizations just getting started with service awards, don’t forget to “grandfather” employees into your new service awards program.  Don’t forget your 6-year and 11-year employees!  Your 11-year employee should be presented with the service awards they have earned and accummulated.  This will mean an increased budget for the first year of your service awards program.

2. Create an infrastructure for your service awards program

Your service awards infrastructure should include a plan for the following:

1. Tracking employee milestones
2. Documenting achievements and contributions
3. Notification system for managers and award recipients
4. Award redemption process
5. Presentation format

Putting some thought into how your organization will handle these elements of your service awards program will save you lots of headaches once your program gets rolling.

3. Document achievements

On employee service milestones, it’s important to recognize contributions, not just time spent warming a seat.  For example: “Anna, congrats on your 5 year anniversary.  We appreciate the contributions you’ve made on helping us achieve our Z-goals and demonstrate exceptional customer service.” In order to do this effectively, you need a system in place to document the employee’s achievements and contributions along the way.  If no other systems are in place, annual performance reviews may be a tool you can use to accomplish this.  (You’ll need to be sure to make a point of including positive feedback in performance reviews!)
Many Terryberry clients crowd-source this documentation using social-media style recognition.  These types of programs create a shared “recognition feed” within your company where coworkers can give shoutouts and praise whenever they see an employee going above and beyond or demonstrating core values.

4. Create a WOW moment with the award presentation

Whenever possible, a service award should be accompanied by a face-to-face presentation where the recipient can be acknowledged for his or her contributions.  Award presentations can be group events, or one-on-one presentations with the employee’s manager.  At a minimum, group award presentations should take place once a year. Many Terryberry clients hold quarterly or monthly service awards events in order to recognize employees nearer to their respective milestones.

Bonus: Download the Award Presentation Cheatsheet to help award presenters prepare for creating that special moment of recognition.

5. Guidelines for creating a service awards budget

Organizations spend an average of 2.7% of payroll on recognition and rewards.  When it comes to service awards, typical spend in 2016 ranges from $25-35 per year of service.  This means a 5-year award would typically range from  $125 to $175 in value.  10% of your service awards budget will go toward administration costs, 10% toward the awards presentation, and 80% to the physical awards.

6. Use meaningful awards

Avoid using cash or gift cards for service awards.  Regardless of the intentions, cash awards are viewed by employees as compensation. They will be spent and then forgotton.  A meaningful service award should serve as a lasting reminder of a signficant achievement. Effective service awards share the following characteristics.

• Personally meaningful
• exclusive and symbolic
• Lasting
• Gamification: higher milestones receive higher recognition