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Service-Anniversary Awards Miss the Mark with Millennials

Making 5 years of service the first milestone won't engage younger workers

A group of business people standing next to each other.

While research shows that years-of-service awards are viewed positively by employees, many of these programs miss opportunities to recognize younger workers.

"Service-recognition programs can have a strong causal impact on key engagement metrics like length of tenure, sense of belonging and positive feelings toward the organization," said Kimberly Abel-Lanier, vice president at St. Louis, Mo.-based Maritz Motivation Solutions, an employee engagement firm. But while most organizations have some way of recognizing service milestones, "HR managers may be taking their impact for granted" and failing to follow best practices, she cautioned.

A recent Maritz white paper, The Future of Service Awards and Milestone Recognition, notes that programs typically begin with fifth-year anniversaries but that Millennials' average tenure with a company is 2.3 years, according to the Bureau of Labor Statistics.

"There is concern about how Millennials respond to service-recognition programs," said Abel-Lanier. "By 2020, Millennials will make up 50 percent of the workforce. With many programs offering the first milestone award at five years, the question is whether Millennials will stay with an organization long enough to be recognized."

[SHRM members-only policies: Recognition Policy: Service Awards and Retirement Gifts]

Questions to Ask

To evaluate whether a service-recognition program meets the standards for best practices, she advised asking five questions:

  • Does your program have clearly defined goals and objectives?
  • Are expectations for employee and manager participation clear?
  • Is receiving a milestone award from your organization a personal, memorable experience for employees?
  • Do employees want the gifts they receive at service anniversaries?
  • Do these awards create and reinforce connections for employees to their sense of purpose and the impact of their contributions to your organization?

In addition, to make service-anniversary awards more meaningful for Millennials and Generation Z employees, Abel-Lanier recommended that organizations:

  • Implement early milestone recognitions. Programs that begin recognizing anniversaries starting at five years miss significant opportunities to include, engage and retain younger workers. Consider acknowledging contributions beginning at year one with mini-milestone awards in high-turnover organizations, as well as at year three.

  • Ask employees how they want to be recognized. Survey employees or convene focus groups to learn how workers feel about existing years-of-service programs, or ask recently recognized employees if they have suggestions for improving the experience.

  • Incorporate social media sharing. Give employees the opportunity to be recognized by their friends and connections online.

Most HR professionals say their company’s recognition practices had a positive effect not only on retention but also on engagement, culture and employee happiness. And that’s not all. When recognition programs were linked to organizational values—in other words, when they reinforced the outcomes and behaviors most associated with the company’s guiding beliefs—the programs were more likely to lead to a higher perceived return on investment among employees.

If employees are heading for the exits, try tying recognition programs to your organization's values.

[SHRM members-only toolkit: Managing Employee Recognition Programs]

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