Feature Article - May/June 2016

Length of Service Awards

Still Relevant After All These Years

By Rick Dandes

While job-hopping may be the new norm for millennials in a modern-day working world where no company ensures or even pretends to promote a "job for life," there are many organizations that have long-tenured employee populations who are motivated and feel appreciated being recognized with awards for their years of service.

"Yes," insisted Ira Ozer, president, Engagement Partners, of Chappaqua, N.Y, "these awards are still relevant, although they are a traditional form of recognition, which sounds almost like a quaint notion these days."

For more than 75 years American organizations commonly recognized employee longevity at five-year increments. But length-of-service award offerings have been forced to change during the past decade to meet the diverse preferences of a changing workforce, explained Kimberly Abel, vice president, Employee Solutions, for Maritz Motivation Solutions, Fenton, Mo.

"For the first time," she said, "there are five generations in the workplace, which represent different points-of-view on what groups value and how they want to be recognized. The 'employment' contract is also changing, from more and more virtual workers to less tenure and a robust merger/acquisition business environment."

Since companies have lost their sense of paternalism, no longer offer a job for life and treat employees as human capital, service awards have similarly lost some of their sense of meaning and of being authentic. And because most people will only stay in a job for three to five years before switching, the traditional five-year service levels have become irrelevant, except for the long-tenured employees, who may or may not be "actively engaged" in the business.

There has also been increasing globalization that needs to take culture differences and dimensions into account for recognizing length of service. And finally, new tools and capabilities offer new, innovative ways to socialize and personalize celebrating service.

Nevertheless, Bill Martocci, president, Carlisle Sales and Marketing, Oakdale, N.Y., maintains that length-of-service awards are alive and well. He even went one step further and said, "This form of recognition is growing. Everyone understands the idea of being recognized for longevity. Today's millennials know about receiving the 'gold watch' for 25 years of service. It's basic psychology. Everybody wants to be recognized for doing good work. So years-of-service awards are not lost on the new generations, even if what they desire as a reward is not the same as it was in years past."

Employees are more engaged when they feel their work has purpose and meaning, outside of earning a paycheck.

Stability in an organization will always be important for a number of reasons. Employees are more engaged when they feel their work has purpose and meaning, outside of earning a paycheck. Service recognition at key milestones is an opportunity to validate and commemorate meaningful work over time. Potential employees also like to see stability and a growth path. Meanwhile, clients want to see stability in the organization and a reliable contact. And the company needs stability to cut down on the real internal costs involved in training and recruiting.

Years-of-service awards are particularly relevant in specific industries, such as financial institutions, education, public service or other areas where tenure is the norm, Martocci said. "More progressive companies or emerging technology companies tend to see less relevance in tenure due to a more transient workforce. However, milestones are in the eye of the beholder, so in those organizations, you might see more recognition at earlier timeframes than before."

Companies that have social media boards will often post the work anniversaries on their site, and those employees with a one-year anniversary are recognized, along with other milestones.

The recognition of employee stability or longevity for continued service at the one-year and three-year milestones is "certainly a trend," Martocci continued. Some organizations even recognize milestones within the first one-year span with token recognition awards, and then again in some way moving forward. This is not unusual in the transportation industry, for example, where an employee's tenure is related to years-of-safe-driving.

Years-of-service awards are also an important foundation to creating an overall culture of recognition. After all, it makes sense to have that new employee indoctrinated early, showing a commitment by the organization that your service is appreciated beyond the negotiated pay structure. As the employer is typically sinking the most equity into that employee in the early stages of their employment, such as training, acquisition costs like advertising for the position or headhunter fees, it is important to retain that employee past their training and education period, yielding results for that effort.

"If a token of appreciation helps that employee want to stay, feel good about their work environment, and feel appreciated," Martocci said, "chances are that employee will not be seeking other work opportunities. Combine that with an improving economy, and more companies are willing to make this type of spend."