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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Great Employees vs Average Employees

You might argue about some of following employee traits, in fact some of them may even bother you, but many would say that these are the qualities that make a good employee great and great employee truly remarkable. 

This list is not ours, the gist of it came from a blog post by Jeff Haden a few years back; we’ve altered it slightly to match our own experience in implementing hundreds of successful employee recognition programs. 

What makes an average employee great?

  Ø  They ignore job descriptions…they think on their feet and adapt and change quickly to shifting priorities

  Ø  They’re eccentric... people who aren't afraid to be different naturally stretch boundaries and challenge the status quo, and they often come up with the best ideas.

  Ø  But they know when to dial it back...the best employees know when to play and when to be serious; when to be irreverent and when to conform; and when to challenge and when to back off

  Ø  They praise publicly, and complain in private…Remarkable employees recognize the contributions of others, especially in group settings where the impact of their words is even greater.  But they come to your before or after a meeting to discuss a sensitive issue knowing that bringing it up in a group setting could cause a problem in the group

  Ø  They speak when others won’t…remarkable employees have an innate feel for the issues and concerns of those around them, and step up to ask questions or raise important issues when others hesitate.

  Ø  They like to prove others wrong... education, intelligence, talent, and skill are important, but drive is critical. Remarkable employees are driven by something deeper and more personal than just the desire to do a good job.

  Ø  They’re always fiddling...average employees follow processes. Remarkable employees find ways to make those processes even better.

  Ø  They volunteer and aren’t afraid to lead...average employees don’t like to do either.

When you find employees like this Recognize Them – Often!

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A Check List to Solve the Typical Employee Recognition Program Problems

Here is a list of some of the issues we hear from many of our first time clients about problems they’ve had with their past employee recognition efforts. It also contains some simple ways of how to avoid them:

Lack of Use

Use it or lose it!  In our opinion the single biggest reason that most programs fail is because they aren’t used.  For a variety of reasons many managers just don’t use them as much as they should.  This is often a simple communication, training and feedback issue.  Make sure they understand the program.  Then take the time to educate managers on how to use it and hold them accountable.  A simple monthly report to all managers copied to executive management can work wonders. 

Give Your Employees Award Choice

Make sure the awards you have for your employees give them choice. Remember it’s not what you want them to have it; it’s what they want that counts.  If you have the time and platform to accommodate all types of awards and lifestyle activities, then make sure you use as many as you can.  If not, consider any of several gift card systems that offers hundreds of the most desired retail and lifestyle gift cards available.  

It’s Not Always about Bottom Line Results 

Employee recognition is not always about the bottom line results, it needs to be about reinforcing a company’s values like enthusiasm and a positive attitude. Positive mental attitudes are a big reason successful companies are successful! Of course you want to reinforce positive behaviors that lead to improved measureable performance, just make sure your program has a balance.

Don't Use Cash Rewards

Don’t confuse recognition with compensation. There is a wealth of research to suggest that recognition and praise is a better motivator than cash. The last thing you want to do is having employees mistake your program for salary or a bonus. Time and again we here from clients that wished they had never started their recognition with cash as it is now an expected part of compensation.

Remember Team Recognition 

While your program should be about individual performance, you also need to focus some of your energy and budget on recognizing team effort. This can be especially important for companies with a large mobile or flexible workforce.       

Be Fair 

 This should go without saying it but make sure that all your program rules are fair.  Individual employee recognition can be somewhat subjective.  Keep it as objective as possibly showing a clear and logical decision-making process.

Start Small and End Big

Small recognition daily ends up creating habits that last.  Research shows that continuous and consistent recognition using minimum awards will provide better results that sporadic recognition to only a few using larger awards.

Use an ROI

One of the first things financial management looks at when considering a budget reduction is an employee recognition program, especially when viewed as nothing but a feel-good-activity. Align your program with your businesses goals as a performance driver.  Use monthly reporting to recognition with results and always calculate business impact and ROI.

For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net

The Thank You Chain - Start Small, End Big

I heard an allegory a while back about a man who wanted to develop a more generous approach to life.  He asked an Indian swami man how to proceed.  The swami’s advice was simple:

“Take $100 and give it away. Not all at once but, slowly, $1 a day for 100 days.

Look for someone who could use a $1 and give it away.”

At the end of 100 days, the man’s heart had changed. His awareness of those in need became sharper. He saw the need around him. He fulfilled it. His giving heart became bigger. $1 became $5 as he saw more need and sorted out how much more the gift did than it accomplished in his pocket. $100 over 100 days created a generous heart forever changed.

While this could be a story about generosity, it isn’t. It’s a story about developing any virtue you want. Healthier life styles? Fitness? Smoking cessation? Money anagement?

You name it. Start small. Do it again tomorrow, and the day after that and you’ll be amazed at the change.

I’ve never met a person in HR who wasn’t interested in employee recognition.  Hundreds of books are written on the subject, and billions of dollars spent on research, software, training, communications and rewards to make it a part of your organization. 

What if you applied the principle of the story above?  What if you got one person to say thank you to a fellow employee for their performance, and then two, and the two thanked two more and so forth?  And they did it again tomorrow and the day after that.  You would be amazed at the Thank You Chain that permeates your workplace…and it didn’t cost you a dime!

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For more information on Ultimate Choice Inc.’s products or services or other white papers please contact us at Ultimatechoiceinfo@cox.net