As far as I understand medals, they add points directly to the Promotion Score of the officer they're given to. You can see this Promotion Score by selecting the officer in the commanders tab (f4) where his other vital information is (health, etc).
Depending on where my navy is my medals can get up to a thousand points for really exceptional stuff - At the begining where Promotion Scores range from 0-2000 I usually do 100-200 value medals. Basically, I always orient myself when I create new medals on the times that are. Makes medals obsolete or insignificiant after a while, but oh well.
