C.A. Short Company is often asked, “Is it possible for you to provide a total cost analysis, down to the penny, for our service award program?” 

Most companies are shocked when our team can confidently answer with “Yes.” 

Service Awards: Average Pricing Model versus C.A. Short Company’s Budget Control Pricing  

The recognition industry typically uses an average pricing model when designing service award programs.  

We prefer to design employee recognition programs with budget control pricing – this allows us to give our customers an exact number of what they will spend and provide finite reward options within their budget.  

The average pricing model is antiquated and, honestly, deceptive.  

Employee Recognition Budget Cost Breakdown  

Here is how a cost breakdown typically works...  

Organizations set an annual budget for employee service milestones.  

For example,  

  • 5 Year Service Milestone = $205 
  • 10 Year Service Milestone = $370 
  • 15 Year Service Milestone = $685 
  • And so on.  

The cost of an employee’s 5-year award could be as low as $180 or as high as $227.  

So, the average price of your 5-year level is technically within your budget of $205. But you could spend as much as $227, depending on what award your employee selects.  

Service Milestone Awards Price Average Guaranteed Budget Control Price Average Price Range Price Swing
Low to High
3 Years $85 $85 $66-$98 $32
5 Years $205 $205 $180-$227 $47
10 Years $370 $370 $330-$418 $88
15 Years  $685 $685 $610-$787 $177
20 Years  $800 $800 $675-$891 $216
25 Years  $985 $985 $801-$1,112 $311

In the above example, an employee can choose an award that stays within, under, or over your budget – resulting in spending more than you originally allocated for.  

See how this can be tricky? And potentially budget-busting?  

So, what is the alternative? The concept of a budget control fixed pricing model is specifically designed to accurately predict spending, control budgets, and keep you from explaining the coverage to your CFO. 

How Does Budget Control Pricing for Employee Rewards Work?  

A budget control pricing model is the opposite of the average pricing model.  

Using the same service milestone example above with a budget control model, all awards in the 5-year level would be $205, no matter what service award the recipient chooses. 

It eliminates the possibility that your employee will choose a higher-priced award, therefore eliminating the possibility of exceeding your budget.  

By pricing your awards this way, you can maintain your budget, and ensure employees are receiving awards of the exact same value. 

Why is this such an advantage? 

A budget control pricing model allows you to reduce your employee recognition costs, increase employee engagement, and gain peace of mind knowing that you can now accurately budget for your service award program. 

ICYMI: Executive & Management Buy-In for Your Engagement & Recognition Strategy

Maintaining Fairness in Your Company Culture 

By maintaining a standardized operation for employee recognition and rewards, employees will be given equal opportunity and incentive to provide exceptional work, effectively reducing feelings of favoritism all while boosting company morale.  

Additionally, maintaining a set budget for each employee allows your company to make decisions on what kind of future rewards they would like to offer.  

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Editor’s Note: This blog was originally published in 2014 and was recently updated for accuracy.  

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