Industry Research

How Shall I Allocate Recognition?

Once your management has agreed upon a yearly annual budget to allocate towards years of service recognition, how will the amount be allocated per recognized employee? I will present to you a simple way to help you make your decisions.

If your intention is to recognize employees at 5 year intervals of years of service, how many of these employees did you have in a fiscal year? Let me use an example as follows:

Your company has allocated $5,000 toward a recognition service award budget. When you look at your employees over a year, you find the following:

Multiplying the years and employees (5yr x 20 employees + 10yr x 15 + 15yr x 5 + etc) will yield (435) “years of anniversary”. If your total annual budget for years of service recognition is $5000, then you would allocate $11.49 per “year of anniversary” ($5000 / 435). Therefore, your budget would be $57 for a five year employee and $287 for a twenty-five year employee.

Best decisions with numbers are made by looking at data over a period of time. I suggest that you look at your payroll in each of the past five years. In the same manner as the example above, find the “years of anniversary” that you had in each of the five years. If you use the year with the greatest “years of anniversary” divided into your budget of $5000, you will end up with a dollar allocation per year of anniversary that should keep you within budget in future years. You now have budgetary amounts per years of service that you can issue to your service award provider.

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