Years of Service Programs: The Copycat Effect

By: ITA Group
woman holding trophy and team members clapping for her
Growing up, just about everyone probably received the “Well, just because so-and-so is doing it, doesn’t mean you have to” lecture after some misguided shenanigans. Deserved or not, the goal of that sage advice was to foster independent thinking and decision-making. Following the masses isn’t always the best course. Same is true in the recognition industry. So much for not sounding like our parents. 
For example, we find ourselves offering a variation of that old parental gem to clients simply wanting to jump on board when it comes to Years of Service programs. Market prevalence is not a best practice. Not ITA Group’s, anyway.
“Trends in Employee Recognition,” a recent study by WorldatWork and ITA Group, found that out of the 88% of organizations that reported having recognition programs, Years of Service programs were by far the most prevalent (84%). But make no mistake, we didn’t say all of those programs were seeing impact and ROI.
Does it make sense that every company, including yours, should be operating a Years of Service Program? Ideally, yes… just not the same program. Your program should be strategic to drive behavior in your organization, aligned with your company objectives, and allow for departmental flexibility and corporate oversight. Your specific award strategy also has to mirror your culture. 
Let’s dive deeper and put this in context. We often hear, “What’s an appropriate dollar amount per milestone for Years of Service programs?” Well, tradition tells us the answer would be about $25 annually on five-year milestones (5, 10, 15, 20, etc.). Tradition also tells us the five-year increments are directly related to tax implications for both employee and employer.
But without considering your employees and your company’s unique culture, $25 per year may be way off the mark. There is no one right answer. 
Think about these different industry examples of Years of Service awards:
  • A tech company less than 25 years old competing for highly-sought-after technical talent offers $100 cash per year to its relatively young and technical workforce.
  • A stable, 70+-year-old logistical company gives $10 cash per year to its employees (who tend to be more experienced with a blue-collar mindset).
  • Somewhere in the middle is a 20-year-old retail organization that gives a combination of symbolic awards and cash to its generationally blended workforce.
The specific tactics of these three Years of Service programs vary greatly. That’s because their employee demographics, company cultures and Total Rewards Strategies are vastly different. But these are the very factors, among others, which must be considered if a Years of Service Program is truly to drive engagement and performance. 
But never fear, there are actually a few best practices when it comes to creating and operating an impactful Years of Service Program.

One Size Does Not Fit All

We’ve established the need to look through your organization’s unique lens when it comes to building or revising your Years of Service program. Pay attention to things like your company’s culture, employee demographics, past and present perception of recognition, available resources and how a Years of Service program can help support your company’s mission, vision, values and overall goals. Allow some flexibility in your program framework, so specific workgroups can adapt program tactics to be meaningful to them. Your teams will shine the spotlight in different ways at different times. One team may take the celebrating team member out to lunch, while another may celebrate all milestones together with some donuts at a monthly team meeting. Give them the freedom to do so, and you will find managers more willing to own the program.

Don’t Wait Five Years to Recognize

There are clear reasons why companies don’t provide any type of monetary award for Years of Service before an employee’s fifth year. But this is an opportunity missed. Those first few years of employment are critical when it comes to connecting with an organization’s goals and culture. Something else to consider… does that practice really make sense when the Bureau of Labor Statistics says the average employee tenure is less than five years? That means half your employees never make it to the five-year milestone!  
We find it’s important to tie employee behavior to brand as quickly as possible. Get new employees engaged in your organization and recognition initiatives now, not later. The quicker you get employees engaged, the more productive they are and the more likely they are to stick around. Think about incorporating 30-day, six-month, and one-year milestones into your recognition efforts. Don’t have the budget? Don’t stress. You don’t need to go monetary. You’d be surprised what peer recognition will do. How about primo parking. Or a lunch with the CEO. A simple thank-you early in a team member’s career could mean you’ll celebrate his or her five-year, even 10-year, anniversary with your organization.

Make It Social

Don’t hide your employees’ milestones. Get loud. Be proud. Make it social. You can do this formally, such as a company newsletter or intranet site. Or take a more casual approach with announcements in department meetings or manager emails. Do you use an internal communication tool like Chatter or Yammer? Leverage that collaborative communication technology as a way to spread the word about significant employee milestones. Peers will appreciate the reminder, so they can issue their own form of congrats.

Empower Managers with Information

Make sure managers know the significant milestones ahead for their team, such as birthdays, anniversaries or other significant dates/accomplishments. We can’t blame them for not recognizing their teams if we don’t empower them with the right information at the right time. Not a six-month spreadsheet, just a 30-day calendar should do. At the very least, managers should acknowledge significant professional milestones. But there are many reasons within life’s landscape to recognize and celebrate—wedding anniversaries, new homes or the birth of a child. If a team is small enough, don’t overlook these milestones.

Continue to Assess

Don’t get too comfortable. Don’t allow decades to pass before you formally assess the performance of your Years of Service program. Is it meaningful to employees? Examine the program and the process to ensure it matches the culture you are trying to create in the organization. Have you made recent changes to your vision, mission or organizational values? Have you shifted your Human Capital Strategy or Total Reward Strategy in the past few years? Chances are, if you’ve not made any meaningful changes to your organization’s Years of Service program in the past five years, it’s not as aligned and effective as it could be.
Recognition initiatives are designed to have a positive, sustainable impact on your employees and organization. At least, they should be. That means ongoing analysis, flexibility, ownership, and sharing of information. A broken recognition program—Years of Service or otherwise—is not better than no program at all. And remember, just because everyone else is doing it…

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ITA Group

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