Dear Mrs. Gauri M. Khan,
I have little different take. My views are radically different.
Your "boss" has exactly come up with a proposal that suits proprietor than entrepreneur. Your "boss" is more a boss than a business leader.
Rather than rewarding the length of service, let your boss reward the performance. Your company (or any company fro that matter) progresses because of people performed well. What is the guarantee that a long staying employee has performed well?
For a proprietary concern getting right manpower is a challenge. Against this backdrop, those who stay, those who remain loyal, those who show allegiance to their boss than their job etc become valued employees. While distributing profits, if you make length of service as criteria then are you sure that they are all efficient employees?
By the way, in this 21st century culture, why people stuck to proprietary concern for a long time? Did they lack career aspirations? Were they are in-confident? A confident employee would have moved long ago. Therefore, please check whether the employees are serving because they have nowhere to go. There are three types of commitments that employees show towards their organisation, affective, normative and continuance. While rewarding employees make sure than you do not reward those who have
continuance commitment.
All the best!
Dinesh Divekar