Awards are set up and awarded on the site-side Guild Roster.
Click 'Guild Roster' (or whatever you have named the Roster tab) on your Guild Launch site. There will be tabs for 'Members', 'Characters', 'Roles', 'Awards'... and that's the one that you need.
Here, you can create the Awards to give to your users. Name the award and give it a brief description (something like "Dragon Slayer Award", described as "Given for sheer awesomeness in the Gaming Industry"). You can also choose an image from your file library to display with it, so long as the image is no wider than 160 pixels.
Once you've done this, click 'Add Award' and you will be able to award it to members. The award you just created will appear like this on the 'Awards' tab:
Once you see this, you'll be able to scroll down to the bottom of the 'Awards' tab and award the award to a member! Choose the Award (in this case, the Dragonslayer Award), choose a member and click 'Award Award to Member'!
Once that is done, the award has been added to the user's account and folks will be able to see it!