Role of Longevity Award Programs in a Comprehensive Recognition Strategy
By: Steven Geiger, Ph.D.,
and Doug Kitrell
Reprinted with permission
from the National Association for Employee Recognition
Longevity awards are still
a powerful employee recognition tool, in spite of the culture of uncertainty
resulting from such radical change efforts as downsizing and reengineering.
Nearly 90 percent of the companies responding to a recent survey said they
still offer longevity awards. Only six percent of the respondents have
cut or reduced such programs since 1990.
With employee tenure on a
downward trend, however, HR professionals are questioning the benefits
of longevity awards. As a result, a new recognition model
is emerging that focuses
less on the awards themselves than on how to make such awards more meaningful
to the recipient. In the new model, longevity programs comprise one component
of a comprehensive recognition strategy that more effectively addresses
the needs of changing organizations.
The purpose of this paper
is to examine how companies can measurably increase employees' satisfaction
with longevity award programs by integrating these programs with other
employee recognition efforts.
Why Longevity Awards Are
In light of the changing
employer-employee contract, employees are encouraged to
leverage every activity
to add value, to work more productively and flexibly, and to
learn continually. Workers
are advised not to expect career-long employment, but
instead to consider themselves
entrepreneurs regardless of who pays them. In fact, the average tenure
with a company is less than five years, according to Bureau of Labor Statistics.
In such an environment, one
might think that employee longevity is no longer important and that longevity
awards are no longer as useful as they were in the past. Just the opposite
is true, however, for two primary reasons: Employee longevity is critical
to organizational success; and a culture of recognition promotes longer
Employee Longevity Is
Critical To Organizational Success
Employee longevity has never
been more important. Among the reasons are these:
Employee longevity is required
in order to learn complex tasks. In a knowledge-based economy with increasingly
complex markets, products, and services, employees need time to master
Employee longevity leads to
customer loyalty and higher profits. A summary of studies examining the
relationship between employee tenure and customer loyalty of several industries,
concludes with this assertion:
"...in banking, brokering, and
auto service, long-term employees create higher customer loyalty. Even
in manufacturing, however, where employees rarely meet customers, long-term
employees can produce better products, better value for the consumer, and
better customer retention.
A Culture Of Recognition
Promotes Longer Employee Tenure
Why reward employee longevity?
Generally, organizations reward those activities they consider important.
By rewarding employee longevity, organizations communicate the value they
place on longevity.
Other reasons to reward longevity
are related to the fundamental importance of
employee recognition in
sustaining an organizational culture that employees find
desirable. Note emphasis
is on employees. Longevity awards, like other recognition tools, are only
effective if they are meaningful to the recipients. Here is the culture-related
line of reasoning for longevity:
Employees are highly interested
in corporate culture - even before they are hired. A recent survey asked
executives, "Other than base salary and bonuses, what do recent applicants
ask about during job interviews today?" Corporate culture was second only
Positive workplace culture leads
to employee loyalty, as expressed in longevity. Recent research describes
a complex relationship between workplace culture and employee loyalty,
of which longevity is an important element.
Workers place a high value on
a workplace culture in which they feel recognized. A study conducted in
1946, 1981, and 1995, asked 1,000 employees to rank order rewards in terms
of value. In more than four decades, the results have changed little. "Full
appreciation of work" has stayed at the top of the list, well ahead of
While longevity awards
traditionally have not rewarded work quality, the trend now is
to consider employees' contributions
and make the awards commensurate with
performance, i.e., to use
these awards as "appreciation for a job well done."
A New Approach To Longevity
Many award program administrators,
cognizant of the important role recognition can play in enhancing corporate
culture, are taking a fresh look at longevity awards. When evaluating a
longevity award program, administrators tend to focus on the awards themselves.
The perception is that improving the awards will automatically improve
A more effective approach,
however, is to consider the outcomes desired from a longevity award program.
In most organizations, these can be expressed in terms of two goals: To
increase participants' satisfaction with the organization, and to decrease
program costs, including the cost of the awards themselves and the cost
of administering the program.
Companies that consider program
outcomes when redesigning their longevity award programs are ushering in
a new paradigm for employee recognition programs. With this approach, longevity
award programs are becoming:
Longevity awards are one component of a comprehensive recognition system.
Aligned. All recognition
efforts, including longevity award programs, are aligned with performance
satisfaction with recognition efforts is measured regularly to make sure
that programs accomplish desired outcomes.
An Integrated Approach
A recent Ernst & Young
study found that integrating "employee development or
process management practices"
was key to achieving measurable success with
employee initiatives. In
contrast, most corporations operate their longevity award
programs as stand-alone
initiatives separate from other recognition efforts. Each
program requires its own
separate award program communications, participant
database, and administrator.
Organizations are finding
that it makes sense to combine these efforts for several reasons:
Participant satisfaction is
higher, since employees do not have to contend with redundant communications
and rules for several programs.
Costs are lower, both for the
award media and the administrative tasks that would otherwise be replicated
for several separate programs.
Employees are able to accumulate
award value across programs, allowing them to select the awards they find
An Aligned Approach
Longevity awards are one
tool in the culture-shaping tool box. When integrated with other employee
initiatives such as safety, idea systems, wellness, and others, longevity
awareness can help companies align individual performance with organizational
goals, moving corporate culture in a positive direction.
A Measurable Approach
awards have simply awarded tenure. The results of such programs are difficult
to measure, since low turnover cannot be correlated directly to employee
satisfaction with tenure recognition.
The new approach, however,
contends that not all employees who remain at a company for five years
should be equally rewarded. After all, why should those who have stayed
five years and achieved sales goals, participated in quality initiatives,
and generated cost-saving ideas, be rewarded identically with employees
who have stayed five years but accomplished nothing notable?
By connecting individual
performance and participation to longevity, companies can
reward employees commensurate
with their contributions.
The New Approach Vs. The
While employee motivation
is far more complex than rewards and reinforcement, a single model has
been formulated for performance improvement applications. This model expresses
contemporary motivation theory, and specifically the work of Marvin D.
Dunnette, of the four major processes necessary for motivation: communications,
training, measurement and awards. First, a task must be communicated, and
employees trained to accomplish it. Results are measured to determine progress
toward the goal and overall success of the initiative, and awards are given
commensurate with the level of success.
Communications. Traditionally, employees were notified via mail
about their impending anniversary date and the opportunity to select
a logoed item as an award. Their five-year anniversary might have
been the first they heard about the existence of longevity awards.
This date typically came and went without any public
acknowledgment in the work place. Now, progressive companies
are making the most of these opportunities by choosing a
communications vehicle that allows awards to be changed frequently
if necessary, to meet a diverse and changing work force. Award
choices for several initiatives may be combined giving participants an
opportunity to accumulate award value for items they truly want.
Recognition is given publicly, with mention not only of the person's
tenure but also of his or her contributions. Recognition-related
communications begin with new hire orientation. Opportunities for
recognition, and what they mean in terms of organizational goals and
strategies, are commonly communicated.
Training. In the past, a supervisor or award program administrator
may have handed employees a service award in passing, with an
informal verbal acknowledgment. Now, managers are trained to
make the recognition more memorable for the employee by publicly
acknowledging the individual's accomplishments in a setting
appropriate to the individual. The focus is on the person, not on the
Measurement. One administrator traditionally handled service
awards, keeping a database separate from other initiatives. Now,
however, attention is being given to the efficiency of combining
information from several initiatives to cut down program
administrative costs. The same database tracks performance and
participation in addition to tenure so that employees are awarded
according to their accomplishments and/on contributions.
Awards. Corporations used to provide awards bearing the corporate
logo as prizes for tenure. While these still may be appropriate, many
employees would prefer to receive a utility item - something that is
meaningful to them and that they can use - rather than a piece of
jewelry engraved with the corporate logo. With this in mind,
companies now offer a wide selection of award choices, recognizing
that limited options will not suit a diverse audience. Employees
receive awards commensurate with their contributions. Furthermore,
award selections may be combined with those for other initiatives,
giving employees the opportunity to accumulate value across
programs. The resulting system is not unlike airline loyalty initiatives,
which provide customers a wide variety of opportunities to
accumulate travel credits.
Ten Ways To Maximize Longevity
Awards For Performance Improvement
Here are ten recommendations
organizations can use to leverage a longevity award program, as a key component
of a comprehensive recognition system for performance improvement.
1. Focus on the
satisfaction of participants. Conduct research to determine current attitudes
toward employee recognition programs. This provides a baseline measurement
against which of gauge future improvements.
2. Make sure each recognition
initiative supports corporate strategies. Corporate alignment is key to
bringing about positive changes in corporate culture.
3. Target specific, measurable
outcomes. While longevity programs are not generally linked to ROI, comprehensive
recognition systems can be linked to specific, measurable corporate strategies.
4. Integrate longevity awards
with other employee initiatives. This reduces the administrative burden
for managers and the communication overload for employees. By combining
award opportunities, organizations can offer more award selections and
allow employees to accumulate award value for more meaningful awards.
5. Communicate employee recognition
throughout the organization. Use internal publications, meetings, and bulletin
boards to broadcast people's accomplishments and contributions.
6. Give managers the tools
they needs to recognize individuals. Managers typically are not comfortable
with their ability to give recognition. With some basic training, they
can create memorable recognition presentations.
7. Realize that recognition
is part of a larger process. Successful recognition programs involve numerous
elements: communications, training, database management, administration
(customer service), award selection and fulfillment, and program evaluation,
to name a few.
8. Award people commensurate
with performance, not based solely on tenure. By doing so, organizations
can use longevity awards to drive corporate strategies.
9. Provide a wide selection
of tangible awards. Be sure the award selection satisfies the greatest
diversity of individuals.
10. Do not wait five years
to recognize employees. Begin recognition as soon as employees contribute
to the organization. An integrated recognition systems makes this easy.
In spite of shorter average
job tenures, the importance of longevity awards shows
few signs of diminishing.
Instead, longevity awards are changing to meet the needs
of changing organizations.
Longevity award programs remain an important tool for
employee recognition. The
key is to focus on the satisfaction of award recipients
and on supporting corporate
strategies, not on the awards themselves.
By integrating longevity
award programs with other recognition efforts, organizations
can ensure that all the
efforts are aligned to accomplish performance improvement
strategies. That new approach
to employee recognition can play a primary role in
sustaining a positive corporate
culture, ensuring it is one in which people will want
to work for a long time.