Service Awards – Do they make business sense?

A few days back, I was presenting Rideau’s offerings to a prospective client – a very large company (about 25 years old) with over 100,000 employees globally. When we were talking about tenure based service awards, the client told me that they don’t do service awards as the management believed that no one should get recognized just for showing up – that was what their salary was meant for. My colleague, S. Max Brown, and I were taken aback as we fundamentally believed that service awards were the quintessential foundation block for a good recognition strategy in a company. I have been reflecting on this ever since with a view to create a compelling case for a service award program that can be sold to a very hard-nosed businessman.

My understanding of the way a number of global service award programs work is the following: The employee gets an e-mail congratulating him/her on completing 5/10/15 years with the company with a link to a catalog from where he/she can choose an award. In my opinion, running a service award program this way will probably not justify the investment a company makes in the program. Imagine that on your birthday, your mother or a loved one sends you an e-mail wishing you a happy birthday with an online link for you to pick a gift from. Worse still, imagine if the e-mail came from an automated system that your mother has signed up for, to ensure that she does not forget anyone’s birthdays.

It is widely accepted that service awards are very powerful for the following reasons:
1) It has the potential to touch 100% of the employee population.
2) The criterion for the award/recognition is crystal clear and cannot be disputed at all. Plus the award has no chance of inducing feelings of jealousy among co-workers.

I fundamentally believe that an employee-employer relationship is special and important enough (simply because of the amount of active time an individual spends at work) that a tenure based milestone needs to be celebrated by the employee’s team the same way that a family celebrates an individual’s birthday. This does not mean spending loads of money on cakes and gifts, but simply allowing the employee to be in the spotlight on that occasion and using the service award presentation to create a setting and reason for the celebration.

In conclusion, if the delivery of the award is not done in a meaningful and memorable way for the employee and the audience (may just be the individual’s small work team), I don’t think spending money on service awards is wise – an automated e-card that costs nothing will do the same job.