To many, service recognition seems like an outdated concept – gray-haired employees receiving a gold watch on their last day of work after years of loyal service and all that. So with all the other options available today for recognizing employee performance, isn’t this reward concept better left alongside rotary phones, thermal fax machines and three-martini lunches in the ashcan of business history?

Not so, says Tom Miller, founder and president of The Miller Company, a Dallas-based recognition systems consulting organization. While traditional service recognition programs might seem a little passé, he says, an updated and well-run program can serve as a great tool for communicating and building corporate culture. Reward loyalty, he says, and you’ll generate even greater loyalty in return.

Miller suggests four components to a successful service recognition program.

1. Award to the wise. The most effective awards carry symbolic value. The Dallas-based theater chain, Cinemark, recently began recognizing employees for each year of service through the first five years and then in five-year increments afterward. The awards for the first four years are pins relating to the animated characters the company uses for preview advertising in its theaters. Popcorn Penny, Front Row Joe and the others are familiar to the employees, many of whom grew up seeing movies in Cinemark theaters. The pins also reinforce the fun workplace atmosphere the company hopes to promote.

Whenever possible, leverage your company’s unique history and culture as a means to recognize loyal employees and promote the organization’s cultural values.

2. Hear ye, hear ye. Communication is a key factor with any reward program. Issues to consider include:

• Do your employees even know the program exists?
• Do they know why it exists?
• Do they know why it’s important?
• Do they know how they stand to benefit?

A service recognition program should be launched with all the fanfare of any major corporate initiative.

3. Presentation is everything. Personal, sincere delivery increases a reward’s effectiveness exponentially. Ideally your award presentation will be made in the presence of gathered coworkers and other significant participants and will include a brief story or anecdote relating to the recipient’s loyal service. A genial atmosphere is welcome – but no jokes at the recipient’s expense. While you’re at it, remember to reinforce how much the company values all of its employees’ loyal service.

4. You need it when? Reward and recognition program administration used to be a headache with migraine written all over it. But nowadays, with Web-based programs featuring real-time inventory reporting, award ordering, shipping information, budgeting tools and program management tools, there’s no excuse for red tape-related holdups. If you’re still encountering bottlenecks, it’s time to upgrade.