Recognize This! – Years of Service programs do little to engage, encourage and reinforce employees.

How important is recognition to employees? A recent study out of Australia reported “employees value their bosses’ ability to give good feedback and recognition more than any other attributes.”

Sadly, I’m not surprised by another finding in the report that “49% of the office staff want their employers to publicly recognize and reward their achievements, yet only 38% of employers plan to recognize top performance in 2011.”

That’s even worse than it sounds. Notice the phrasing – 49% of all employees want more recognition, yet 38% plan to recognize only TOP performers. What about the rest of employees of who are doing good work, demonstrating your company values and helping team members, customers and the company as a whole achieve its goals?

Why do employees want the recognition? It’s not a grab for kudos, as some like to think. No, “they want to know really clearly what is expected of them and whether they are achieving it or not.”

As I’ve said many times, the annual performance review simply doesn’t’ cut it for giving employees the level of feedback they need. Yet, neither does a Years of Service recognition or Employee of the Month designation.

By far the most popular “recognition” program (WorldatWork, Globoforce/SHRM survey), Years of Service “doesn’t move the needle on employee engagement as well as recognition tied to corporate values and the great work employees do,” as Carol Meyers said in last week’s webinar. Years of Service programs have their place in acknowledging employee loyalty over time, but they should never be the primary recognition mechanism in an organization committed to engaging and motivating its employees.

As my Compensation Café colleague Laura Schroeder recently wrote:

“You don’t rely on massive annual processes in other parts of your business. For example, I’m guessing you don’t produce all your widgets in one day or pay all your suppliers once a year because it would be eccentric and inefficient. So why reward people that way?”

Even worse is the traditional Employee of the Month program. These often devolve in one of two ways – either turning into a competition instead of praise and acknowledgment or becoming a “who’s turn is it this month?” exercise. Susan Heathfield summarized the challenges of Employee of the Month programs well in About.com:

“My most important concern with Employee of the Month recognition is that employers will believe their job of creating a motivating, rewarding work environment for employees is complete with this award. Employee of the Month recognition is not a substitute for day-to-day positive recognition, reasonable pay and benefits, company sponsored activities and events, and an environment of appreciation. With so many opportunities available to provide employee recognition, what employees want from work, why offer an Employee of the Month award with its inherent problems?”

Effective recognition occurs in the moment, positively reinforcing in a timely, specific, personal and meaningful way what the employee has demonstrated or achieved that the company needs to see repeated time and again.

What do you think the value is of Years of Service and Employee of the Month programs? What role do you see them playing in employee engagement and culture management?