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Are Service Awards Dying?

Service awards have traditionally been a way to reward employees for their loyalty. When an employee was at a company for five, ten, fifteen years, he or she deserved recognition. This was appropriate when employers were less focused on the culture within the workplace and more focused on the continual turning of the gears of business. In the current job market, though, most employees do not stay at a company long enough to qualify for higher levels of service awards. In fact, a 2016 study of employee tenure found that employees 25-34 years of age stayed at a company for an average of 2.8 years. The chances of employees staying at a company for more than 2 years is highly unlikely. With such high turnover rates, service awards are becoming less motivational to employees. If the only time they’re being recognized for their hard work is once a year (or five), they will almost never be recognized.

Should We Ditch Service Awards?

Of course not! Many people think that because of the outdated tradition of only awarding years of service, we should do away with service awards completely and only focus on recognizing employees when they do good work. We here at WorkStride say that both instances are important! In fact, since employee turnover rate is so high, it actually gives more value to service awards.

Do Service Awards Help Company Culture?

In the past, service awards were considered appropriate recognition of employees. It was rather impersonal, but without corporate culture suggesting the benefits of happy and healthy employees, it seemed to suffice. Now, it is considered extremely important to provide a culture where employees feel comfortable. When they do, they are more creative and efficient, and they make fewer mistakes in their work. The trick to keeping employees happy is to provide various outlets that appeal to your employees. One solution will simply not suffice. There needs to be multiple initiatives in order to keep your employees happy in the long term.

Some of these initiatives could be wellness contests, stocking healthy food in the fridge, workplace social events, internal baking competitions, peer mentoring, added benefits beyond the industry standards, employee recognition, and more. Pairing any or all of these ideas together will help build your culture.

The Limitation of Service Award Rewards

Additionally, federal law requires service awards only be redeemed through physical objects (or, at least, there’s less of a tax implication stated in the tax code). Sure, this might appeal to someone who needs a new toaster at that exact moment, but what does a gadget mean long-term? The “Hedonic Adaption” is a trick our brains play on us so we lose interest in physical items fairly quickly (Just look at that box full of old mp3 and cassette players you probably have laying around). This is why “happiness over material items quickly fades.” Experiences, on the other hand, stay with us. We can learn from them, and remember them years later. Unfortunately, service awards legally cannot include experiences or monetary gifts. If, however, you pair service awards with employee recognition, you can provide your employees the rewards that will actually make them happy.


At the end of the day, service awards are becoming less common because employees are not staying at companies long enough to receive them and federal law limits the impact they can have on recipients through redemption rules. On the other hand, if an employee sticks around for ten years, it really shows the employee’s dedication to the organization and that definitely deserves a lot of appreciation.


Book a demo with WorkStride to see how service awards paired with regular employee recognition can help improve your company culture!

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