Do Years of Service Programs Still Make a Difference?

Through research of mainly their own clients, O.C.Tanner, the largest company in the employee service awards field, concludes that service awards are a very valuable business tool and fulfill a critical role in culture and employee engagement of an organization.  This research might have been more useful had it compared years of service programs to how effective they are vs other types of employee recognition, but that's another subject. 

Years of Service are the most prevalent type of employee recognition program in corporate America.  They have become a “bronze shoe.”  It was the first type, has been around since our great-grandparents time, and is ubiquitous in the field of employee awards.  If you ask people it they believe in employee recognition programs they invariably answer in reference to a years of service program.  If you ask them if it is effective they will say that their employees seem to like it, but that’s about it.  What’s not to like? Every five years or so you get a plaque or can choose an award from a traditional catalog, the pricing of which is normally far above retail, but as you don’t pay for it or pay taxes on it you're happy with it.  It’s the “don’t look a gift horse in the mouth” rationale.  You're happy that is until you find out what your company paid for it.  Then it's only natural for some to compare it to the value of the item online, or suggest that maybe they were "worth more" than that a $250 TV for 10 years on the job.  Actually, not divulging the price of these items is a ploy that the award companies have used for years and a reason they tell you not to use gift cards. Does that make sense?  Do you really want to hide this price?  When the employee finds out your paid $400 for the item and they can find it online daily for $250, those can be very uncomfortable questions.

Frankly we’ve never been a fan of these traditional service award programs for several reasons.  First they don’t award based on merit, only time, they have little to choose from in the way of awards and the pricing if you took the time to compare is outrageous.

Taken by themselves, some would say that years of service programs are certainly better than no program at all. The average employee longevity is about 4.5 years.  This does fluctuate slightly year to year, but as almost 100% of years of service programs start issuing higher awards at 5 years, do these types of programs really make sense?  Giving an award to an employee for just being there might make sense to some, but wouldn’t giving an award to an employee for improved performance make more sense?

If you read the Tanner research they say that these programs help increase retention. There

OC Tanner HQ

evidence is that employees stay longer at companies that offer service award programs.  That’s quite a stretch in rationalization.  They say that respondents whose current job had a “career milestone program” projected staying 2.9 years longer than participants in companies without a milestone program.  The Bureau of Labor Statistics actual numbers on longevity would seem to refute the “projected” numbers as offered in the research. 

In our perspective, if all you had to spend on employees is $250 per year, you'd be much better off giving smaller awards on a more often basis than one large award once a year?  The consistent rewarding of performance will help to produce habits toward better performance ongoing.  Recognizing employee performance in the short term rather than rewarding longevity in the long term is a far better use of your budget dollars.  

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