Why We Should Rethink Employee Years of Service Programs

Does your company have some form of long service/milestone anniversary/years of service program? I would be surprised if you don’t. According to WorldatWork’s latest “Trends in Employee Recognition” report, 84% of companies offer some form of this program. In many ways, a traditional years of service program has become a hygiene factor for organizations. By that I mean employers and employees alike have come to expect some kind of acknowledgement for loyalty for remaining with the company for a certain number of years.

Yet companies are missing the boat for a large number of employees. Most companies first give a years of service award at five years, yet millennial employees are out the door far sooner. Indeed, this post in SmartBrief tells us:

“The average job tenure in the U.S. is 4.6 years. Millennial employees? They’re departing jobs every 2.3 years. When you consider that they’ll compose more than 75% of the U.S. workforce by 2025, you’ll see the reason companies have started to scratch their heads and say, ‘What gives?’”

The obvious lesson here is, if you’re going to invest in a years of service program, then be sure to start that program earlier than year five. Forward-thinking companies are revising their years of service milestone anniversaries to be years 1, 3, 5, 7, 10, and then every five years thereafter.

But a more subtle lesson we must not ignore is the importance of recognition itself. In many organizations, the acknowledgment of a years of service anniversary is the only formal recognition employees ever receive. And regardless of the frequency of milestone anniversary celebrations, this is far too infrequent and impersonal.

The same SmartBrief points out:

“For one thing, they [millennials] want their job to mean something. A study on millennial employee satisfaction hints at more than a few who say they’d rather work at a place where they can make a direct social and environmental impact. About 72% of young workers about to enter the job market feel that way. As for millennials already working, 55% report working at a company where they can make a social and environmental impact. They are more likely to report job satisfaction (49%) that those who don’t work in a similar environment (24%).”

Organization leaders must become more adept at communicating the importance of employees’ work so individuals clearly understand how their efforts contribute to achieving the bigger mission. And this is important for employees of all generations, not just millennials. Research shared by Harvard Business School professors Teresa Amabile and Steven Kramer in The Progress Principle show that employees of all ages are most motivated by making progress in meaningful work.

Acknowledgement of loyalty every few years will not help employees understand how and why their work is meaningful. This goal is far better achieved with frequent, timely and very specific recognition of an employee for actions and behaviors that help achieve strategic objectives. The two in combination – celebration of long service integrated with detailed timely feedback and praise – delivers the greatest impact for employee motivation and engagement.

At what intervals does your company acknowledge employee years of service? Are you more motivated by an anniversary celebration or more timely, specific recognition?

As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[Jay Schuster]

How long to we REALLY want folks to stay with one organization? Combine this with how effective 'lunch with the boss' is as a way to keep people and you must wonder. Would it not be wiser to recognize how much they have measurably grown in terms of critical skill and competency than merely how long they have stayed around?

If we are able to 'praise' people for staying around a long time should we perhaps not direct some of that 'praise' to those who not only stayed around but also stayed relevant? Perhaps it is in how we define a 'service program'. Maybe at the 'service awards banquet' we have two lines . . one where folks have contributed many years of growing in value and the other for folks that just 'hung around' a long time. Something to think about me thinks.

[John A Bushfield]

years of service awards are rapidly becoming a hypocritical practice, given most employers tendency to reduce headcount as a default reaction to financial stress. Tenure really doesn't matter when determining who is on the 'list' for a RIF. In fact, some companies are targeting long term employees as layoff candidates, thinking that replacing them with younger, less expensive employees improves the 'bench' strength for future promotions.

Employers would be wise to consider practices that recognize values once important to organizations but no longer meaningful.