Giving out employee service awards before employees reach 5 years of service is becoming more and more popular among HR professionals. In fact, a recent report by Accelir on 2014 Rewards & Recognition Trends shows companies with employee service award programs are moving towards early recognition. In many companies, employee recognition is only given on milestone anniversaries, which means often employees are only recognized once every 5 years! I’ve got some insight into how you can integrate early recognition awards into your existing service award program.
There are many different ways you can structure your award tiers. Some of our clients give out awards at 1, 3, 5, 7, 10, 13, 15, 17 and 20 years of service. Others give out service awards more frequently until 10 years is obtained and then every 5 years thereafter. Many of our clients, however, are giving out service awards for each year of service an employee completes. In some cases, recognition is given to employees for each year completed but awards are only given out for 1, 3, 5, 7, 10 and every subsequent 5 years.
The average award amount is $20-25 per year of service achieved. This would mean 5 year service award recipients receive $100 gifts, 10 year recipients receive $200, et cetera. In some industries, such as technology and healthcare, we often see the dollar value of the employee service award increase due to the amount of competition for talent. In these industries, we can see $100 awarded for each year of service achieved. Alternatively, in non-profit companies and the public sector, the dollar value awarded per year of service can be below the average of $20-25 per year of service achieved.
In 2011, WorldatWork published a white paper on trends in employee recognition stating that most companies award an average of 1% of payroll. One way to easily find out if you are awarding the right amount is to calculate what 1% of the average salary is for a given department or job type. If someone is making $50,000 per year, their service award should be about $500. If you award far less than this amount, employees are likely to still appreciate the recognition but may not feel the award is meaningful.
Aligning the employee service award and the actual anniversary date is very important. If you can recognize someone on their actual anniversary, it is more meaningful and personalized than waiting until the end of the year. In addition, if you only award employees once a year, some people may be closer to their next anniversary than the one they are being awarded for.
Our clients achieve timely recognition by ordering printed recognition materials once a month and then distributing to employees on or around their actual anniversary date. Another way this can be achieved is to send employee recognition emails to employees on their anniversary date. What better way to start the day than to open your email and find your company is recognizing you on your actual service anniversary and giving you an award?
If you are thinking about adding early employee service awards to an existing program, some employees may feel they missed out if they recently reached an anniversary that would be recognized if it was only a few months later. I’d recommend looking at anyone who reached a milestone you would recognize with the new program policy in the past 3-6 months and include them on your initial order list. Some companies go as far as giving every employee with more than 1 year of service before the new policy goes into place with a service award, but these are usually all the same dollar value.
Recognizing early employee service awards will allow you to recognize your employees more frequently than once every 5 years. Consistent recognition has much more of an impact on recruiting and retention. Start recognizing your employees more consistently with early recognition!
