On the Edge: It's Change (not Time) That Should Be Rewarded
September 02, 2008
By Paul Hebert
Discussions on the coming talent shortage have been all the rage for the last year or two. As the Baby Boomers retire and Millennials take the reins, programs offering to drive employee retention have been popping up like whack-a-moles at a county fair.
Companies are concerned with the so-called "brain drain" when the Boomers leave and the lack of company loyalty Generation Y seems to be exhibiting. Some experts think the drain is real. Others believe that the economic issues related to retirement savings―or lack of―with Boomers means the drain is overstated. In either case, more Millennials are entering the workforce and they don't see things the same way as their predecessors.
Companies are fervently looking for ways to retain these new-age employees through updated reward and recognition programs. But those solutions still always seem to include one stalwart―the Service Anniversary Program. I wonder if it is time to look at putting that program out of its misery.
Is Rewarding Longevity and Endurance Overrated?
Service anniversary programs were designed to reward longevity at a company with increasing award values as the employee's "time in the saddle" increased. At five years, you get a clock. At 10 years, you get a much, much better clock. And at 25 years you get a much smaller, but more valuable clock―the gold watch. (Heck, even the IRS recognizes service anniversary programs and gives a tax break for them. But I've never real keen on things that the IRS endorses, as they don't scream innovation in my book.)
Seems a bit…monotonous, doesn't it?
Service anniversary programs were designed in a different time and for a different audience. Boomers and their predecessors were happy when things didn't change. But Millennials are different. They were raised in a hyper-connected world where multi-tasking was a norm. They have seen changes in technology that far outstrip anything that came before. They have watched their parents, who stayed with companies under the guise of loyalty, get laid off and deal with unemployment. In the mind of a Millennial, change is SOP―standard operating procedure. Gen Y believes that staying in one place is the same as going backward. And, therefore, rewarding a Millennial for not changing is an insult.
We shouldn't measure time: We should measure change.
The New Measurement for Reward
Future service anniversary programs should be linked to the growth of the employee versus the time the employee has been with the company. In other words, let's celebrate changes in the employee, not the fact that they didn't change companies. Service anniversary programs should be buried and allow its successors to move into the spotlight.
But what should that successor look like? What should the elements of an employee "change" program be? How should we reward and recognize employee loyalty―rather, commitment―to the company if time isn't one of the metrics?
Over the past decade companies have come to view their customers differently. Now companies have moved on from simply valuing customers who repeated business to "valuing" customers―those that not only repeat but expand their purchase footprint (bought more, different stuff) and actively engage with the company. In other words, companies use new metrics other than time to define a valuable customer. They use net promoter scores and "mix" of product purchased.
Should we create an analog in the employee world to measure employee value? Can we look at employees through the same type of lens that companies are starting to view customers? If so, what would that look like?
Loyal employees:
• Seek training opportunities
• Seek new jobs within the organization (They want to contribute in more ways)
• Recommend friends and acquaintances to the HR department or their managers
• Recommend their company's products/services, acting like an extension of the sales force
• Deliver results, not just hours in a chair
• Constantly look for ways to enhance the company's value to their customers and their shareholders
Given that loyalty is less and less about time, and more and more about growth, should the service anniversary program go the way of the Dodo and make room for a new type of "Service Reward Program" that rewards employees for growing? Should the new program be based on an equation that takes into account the things that make employees valuable to the company?
We've by far outgrown rewarding people for just staying put. It's time to start rewarding people for staying active.
INCENTIVE online columnist Paul Hebert is currently the Executive Director at Excellence In Motivation, Inc., (www.eim-inc.com) and is responsible for new client solution development. Over the past 20-plus years, Paul has worked with many Fortune 100 clients to develop non-cash reward and recognition strategies within an overall audience engagement plan. Paul writes a monthly online column for Incentive on incentive industry trends, and he blogs about the incentive industry and how to best engage your target audiences at his own blog, Incentive Intelligence.
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