I give them awards based on how it will improve their performance, and how important that performance is for the ship. For example, the highest medal should go to officers, as it improves the performance of everyone else working in that compartment. Not very helpful for say, the bridge crew. Fatigue-resistant medals should go to those who get fatigued most often.
The Silent Hunter 3 Community Manual outlines the benefit of all the medals. So they go where they are needed, generally going to higher ranked individuals before lower. When all else is equal, I give it out to those individuals with the most experience.
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