Sample Reward Programs for Long-Term Employees

Sample Reward Programs for Long-Term Employees

Programs for rewarding long-term employees can encompass a number different of elements. While many employers must enforce pay caps to take an economical approach to compensation, reward programs can be structured in a way that supports engagement and retention in this group.

Here are just a few sample programs for you to consider:

Flexible Work Arrangements

Older adults who no longer wish to work traditional full-time schedules may find flexible work arrangements appealing. These arrangements could include part-time employment, or flexible schedules with flextime which grants employees some control over the timing of the work day. Compressed work schedules (with longer days but shorter weeks), job sharing, and telework arrangements are additional options to consider.

Phased Retirement Options

Some long-term employees may be seeking a gradual phase into retirement. Many private employers are moving from traditional DB plans to defined contribution retirement or hybrid plans, such as cash balance plans, which do not discourage work past retirement age. These options make phased retirement options easier to implement.

Transition to Part-Time Employment

Some firms have been able to implement programs that allow older workers to reduce hours gradually, while others terminate employment then re-hire individuals as part-time workers. Under the Pension Protection Act of 2006 (PPA), the payment of benefits to in-service workers who are 62 or older is allowed, but new regulations are still pending. Also, the law remains unclear about what constitutes termination of employment, and it would seem that some time might need to elapse between terminating and rehiring for the employee to be considered a new hire.

Hiring Former Employees as Independent Contractors

As an alternative to paying pension benefits to active employees, organizations can terminate employment, then rehire former employees as consultants or independent contractors. While these individuals do not receive employee benefits, this arrangement does allow them to receive full retirement benefits while working for their previous employer. While there are currently no restrictions on paying pension benefits to former employees who have become independent contractors, issues can arise in determining whether the provider of labor services is really an independent contractor (versus a regular employee). It’s therefore important for employers to be cautious when implementing these types of arrangements.

Training Opportunities

Publicly funded training programs have been serving older workers for decades. Although previous legislation authorized special funding blocks for older workers, many states have consolidated these funds into a single funding stream for all adults in an effort to provide universal access to these services. This legislation does, however, allow states and local areas to give priority to special populations, such as older workers, when allocating training funds.

Community colleges are leading efforts to develop job training opportunities for older workers. Such colleges are recruiting workers of the age 45 or older, creating educational and vocational training programs tailored to older peoples’ learning styles, and offering student advisor and supportive services for adult students.


Keep in mind that in addition to using the specific programs listed above, you can also incorporate rewards such as gift cards and tickets to events as reward options. There are many ways to get creative in rewarding long-term employees, but importantly, use feedback to ensure the reward options align with the group’s preferences and needs.

HRsoft is the trusted global leader in compensation management software whose COMPview solution is proven to control and simplify the full process and allocation of merit, bonus and equity awards to drive manager and employee engagement.

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