Ten Best Practices for Employee Service Award Programs

April 27, 2021

By Paula Ambrozic
Most companies formally recognize tenure in some way. The odds are good that your organization is among them. But chances are also good that, like most companies, yours is not realizing the full potential of its service awards program.

By implementing these top 10 best practices shared by great service awards programs, you can establish a solid foundation on which to build a more comprehensive enterprise recognition strategy. The benefits of taking an enterprise approach to creating a culture of recognition are numerous, with the top three being:

Driving employee engagement
Improving performance
Bolstering retention

Drawing on published research and decades of experience and client service in rewards and recognition, Inspirus has found that the first step toward creating a great place to work is to implement best practices that effectively recognize the length of service. Here are our top 10, read on to get more detail about each.

Ensure timely recognition and notification of Service Award Anniversary dates
Involve the most meaningful leader in the recognition experience
Present the award with flair to make the moment memorable
Provide a choice: a reward valued by one may not be valued by another
Deliver a user-friendly process for gift selection
Equip managers with the right tools
Reflect your corporate brand and image
Incorporate a personal touch
Truly celebrate the major milestones
Integrate rewards with a broader recognition strategy

It doesn’t matter that your organization may already have a service awards program. Nearly nine out of every 10 companies have some form of recognition program, and 72 percent of those include length-of-service recognition. 69 percent have both formal and informal recognition programs in place, but formal is still the most common approach — 23 percent only have formal programs. 49 percent of organizations understand a formal recognition program requires a strategy to be effective, with the vast majority (97 percent) aligning it with organizational goals. However, more than one-third feel their programs have definite room for improvement. [1]

The lack of formal strategy may stem from a lack of understanding about what recognition programs are, and how service awards programs, in particular, fit into the larger picture of a recognition culture. Failure to understand incentives and recognition plans are the most common reason they are often misunderstood or criticized. [2]

The ineffective use of recognition programs is one of the most common reasons for skepticism about their value — which often leads to a lack of buy-in among employees and management. [3]

Recognition experts agree that if you present a service award but fail to acknowledge the employee’s accomplishments during his or her years of service and neglect to tie it to the company’s mission and goals, then you devalue the recognition moment and the service award. You also miss valuable opportunities to engage employees and enhance your employer brand.

What is a Service Awards Program, Really?

It may sound overly simplistic, but it’s important to understand the language used to define and explain a best practice recognition program.

WorldatWork and Recognition Professionals International, two global associations focused on compensation, benefits and work-life and rewards programs offer these definitions:

Recognition: Acknowledging or giving special attention to employee actions, efforts, behavior, or performance; offered “after the fact.”
Award: An item given to an individual or team in recognition of a specific accomplishment (usually non-cash) as a form of recognition; length-of-service recognition is the most common employee recognition award.

It’s important to note that “awards” are different from rewards and incentives. A reward is an item given to an individual or team for meeting a predetermined goal. An incentive is any form of variable payment (monetary or non-monetary) tied to performance.

Awards, rewards and incentives each have their own important role in a total rewards or total recognition program.

The Value in Employee Recognition and Service Awards

Perhaps the greatest value from a great service awards program is its ability to kick-start a culture of recognition.

Service awards programs — programs that recognize milestones in an employee’s career — are a foundational component, a steppingstone for moving toward a broader recognition culture. Awards programs are, in fact, the only thing that many companies have, so it’s crucial to make the most of them.

Awards at Milestones and Retention Points

A savvy service awards program will look beyond the typical anniversary dates. They will:

Recognize “mini-milestones” in the first year. For organizations with high turnover, recognizing mini-milestones (every 90 days, for example) can deliver a superior onboarding experience and support early engagement of the workforce.
Achievement milestones. Don’t forget to recognize successes specific to company goals: award employees for one-time achievements such as product launches, miles driven, or sales goals achieved.
Recognize the “in-between years.” With today’s workforce, every year is a milestone. Recognizing service annually is an opportunity to stop and say “thank you.” Recognizing the “in-between years” doesn’t have to be expensive — a simple thanks, an e-card or a handwritten note lets employees know that you care and that they are valued.

Celebrating a 10-year anniversary creates a unique opportunity to commemorate accomplishments and performance over a span of time. Creating the right experience at important milestone anniversaries can ultimately contribute to employees feeling good about themselves and good about the company — leading to higher levels of engagement with tenured staff.

This point is crucial because of the proven impact employee engagement and motivation have on performance. Companies that are in the top quartile for employee engagement also report earnings-per-share growth that is more than four times their competitors. [4]

The Solution: Ten Things That Great Service Awards Programs Have in Common

Employee engagement has reached an all-time highest level (34 percent) since Gallup began measuring in 2001. Employee recognition is cited as a dominant reason behind increased engagement. [5] Numerous studies highlighting success factors in engagement share several common themes that are independent of the cost of recognition programs.

Here are our 10 best practices for a great service award program:

1. Ensure timely recognition and notification of Service Award Anniversary dates

Good: Quarterly recognition presentation
Best: Monthly recognition presentation

It’s always best to make a rewards presentation on or near the actual anniversary date or the event being recognized. Managers responsible for planning and timing service awards presentations should think of them as they would life events celebrated outside the company. Wedding anniversaries and birthdays are typically celebrated on the actual day itself — or very close to it. Why wouldn’t you also celebrate an employee’s anniversary in a timely manner? With service recognition, avoid letting it slip into the next quarter or business cycle.

2. Involve the most meaningful leader in the recognition experience

Good: Senior leadership
Best: Manager

Studies have proven that the most meaningful recognition comes from one’s direct manager. It makes sense. Managers are most closely connected with employees on a day-to-day basis and have intimate knowledge of employee skill sets, competencies and deliverables. In short, managers know their employees best and can personalize the presentation most effectively.

Another advantage of having the direct manager or supervisor give the award is that the presenter can set future expectations and goals for the individual and the company — tying the presentation back to the organization’s mission and business goals.

That doesn’t mean senior management shouldn’t be involved in the presentation. They should be present. But the direct presentation should come from a manager or supervisor.

3. Present the award with flair to make the moment memorable

Good: A stock, scripted presentation for senior leaders given in a group setting
Best: A personalized presentation by the employee’s manager given in an individual setting

An effective presentation highlights individual accomplishments and says something about that person’s qualities — all while reinforcing your organization’s culture, mission, goals and objectives.

Managers or senior leaders responsible for recognition should be trained to understand the appropriate timing, message, delivery and follow-up of recognition for different members of their multigenerational workforce.

While practicality may dictate that service anniversaries are recognized in a group setting (e.g., a quarterly or annual event where everyone receives service recognition) it is a best practice that employee service anniversaries be recognized in an individual setting as well, such as a lunch, one-on-one or in a team meeting.

4. Provide a choice: a reward valued by one may not be valued by another

Good: Company swag, watches, common lifestyle items for home and outdoor
Best: A wide selection of brand name and luxury gifts

Employees want choice, value and brands they trust. For service recognition, many employees also value items that reflect the corporate image in some way. Best practice programs find a way to incorporate all these elements:

Choice. Employees want options that include a wide range of items.
Value. Provide gifts that reflect how the organization values its employees. Service recognition awards are often socialized among peers, family, and friends.
Trusted Brands. In today’s consumer-driven world, employees gravitate toward known brands for everything from electronics to housewares.
Corporate Image. Provide award options that reflect the corporate image and incorporate a branded and personalized item, such as a luggage tag that includes the years of service and commemorates important milestones.

It can best be summed up by saying that the best awards are the ones that you’d not normally go out and buy for yourself.

5. Deliver a user-friendly process for gift selection

Good: Multiple options for ordering: Web, intranet, phone or mail
Best: A unique and memorable experience including customized and personalized website and greetings

With the breadth and depth of service awards offered today, long gone are the days when an HR manager simply kept a stockpile of lapel pins to hand out when the occasion arose. For the optimum user-friendly gift selection process, provide employees with a wide variety of options they can select online or via mail catalogs.

Increasingly, best practice programs are taking it a step further by incorporating a customized and personalized website experience. A personalized greeting upon login, a branded corporate experience delivered via animation, messages from the organization’s leadership, and other creative displays that connect with the company’s mission and vision elevate the experience and make a positive impression.

6. Equip managers with the right tools

Good: Keeping managers informed of upcoming anniversaries
Best: Keeping managers informed of upcoming anniversaries, as well as providing best practice presentation tips, celebration guidelines, and sample scripts

This best practice may sound like common sense, but again, it’s crucial to the delivery of consistent service recognition throughout the company.

7. Reflect your corporate brand and image

Good: The company logo is incorporated throughout the experience
Best: Company brand, history, mission, vision, and values, as well as key imagery, are incorporated throughout the experience
Your company is unique. Your people are unique. Service recognition is a time for reflection and introspection. Organizations that want to set themselves apart and establish themselves as an employer of choice, should use this unique opportunity to reinforce the company brand. The company brand can be incorporated into numerous elements of the service recognition experience, including:

How the recipient is notified
Throughout the recognition presentation
During the gift selection process
Providing a symbolic add-on gift

8. Incorporate a personal touch

Good: Service recognition certificate is personalized
Best: Entire recognition experience is personalized

While good service awards programs will include a personalized service recognition certificate, best practice programs take it further by personalizing the entire recognition experience.

The technology exists today to personalize almost everything — from brochures and certificates to e-cards and gifts. It’s even possible to incorporate a personalized custom website. Employees love to see their names animated when they go to the website to order their award — it’s certainly something they’ll talk about and not easily forget!

9. Truly celebrate the major milestones

Good: Doing something extra at 30, 40 and 50 years of service
Best: Doing something extra at 10, 20, 30, 40 and 50 years of service

Just as some birthdays are celebrated differently, major milestone service anniversaries should also include a “step up” celebration element. Dedicating a decade of service can represent 20 to 25 percent of a person’s entire career — it’s a major milestone event and should be acknowledged accordingly.

10. Integrate rewards with a broader recognition strategy

Good: The organization has a service recognition program
Best: Service awards are the foundation for a more comprehensive recognition strategy

A best practice service awards program is an important first step toward establishing a culture of recognition. It’s difficult, if not impossible, to be a great place to work without a well-designed program in place to appreciate all the hard work, time and effort employees contribute toward making the company great.

Employee engagement is proven to improve job performance and retention. A Gallup study showed businesses with performance management systems that focus on engagement — such as positive workplace relationships, frequent recognition, ongoing performance conversations, and opportunities for personal development — get the most out of their employees. And when your employees are engaged and productive, they are 18% more productive and your business 23% more profitable*. A great service awards program will elevate employee engagement within your organization.

10-Point Agenda for a Meaningful Recognition Presentation

Introduce key upper management. Introduce family members.

State the purpose of the event and its importance.

Introduce the recipient.

Use the recipient's full name, and ask the recipient to join you at the front.

Paint a verbal picture of the recipient. State his or her special attributes and contributions during their career.

Personalize your comments and be specific.

Thank the recipient for their hard work, dedication and loyalty, and thank any family members who are present.

Announce the award and present the award package to the recipient. Shake hands and pose for pictures.

Invite the recipient to speak briefly.

Congratulate the recipient on their anniversary and thank them again for service to the company.

Close the event.