What Is Peer Recognition & Why is it Important?

At work, money doesn’t buy us happiness. Statistics show there is only a loose connection between the money we earn and job satisfaction. But it is possible to boost job satisfaction through one powerful variable: peer recognition.

In fact, peer recognition is so powerful that it can deliver half the engagement of a salary increase at just 5% of the cost. Clearly, peer recognition resonates with us on a deeply emotional level. But why does it create such high job satisfaction, and how can you make it work at your company?

What is peer recognition?

Let’s start with what peer recognition isn’t. Peer recognition isn’t employer recognition. Employer recognition programs are rampant. As far back as 2012, some 75% of companies already had a program for recognition in place. 

Peer recognition is different. Peer recognition is the validation and encouragement you receive from other people, especially those you perceive to be credible, such as colleagues. And it’s this distinction that leads to feelings of acceptance and significance.

Why is peer-to-peer recognition important in the workplace?

Peer-to-peer recognition satisfies a different need than salary. A salary is important for practical purposes: feeding a family, maintaining a home, or saving for retirement.

Recognition, on the other hand, hits employees’ emotional needs: the feeling that comes with having a positive impact on the world.

Congratulations from the company is a nice benefit. But peer-to-peer recognition tends to have more credibility because it comes from colleagues and friends who understand our situations. Consider the benefits that come with peer-to-peer recognition:

  • Employee engagement: Any form of recognition can help with employee engagement, even if it comes from management. A compliment on recently completed work not only reinforces good habits, but it lets employees know that their work was noticed — and therefore brings social context to that work’s meaning.
  • Concrete productivity results: According to one study, peer-to-peer recognition programs are over 33% more likely to create better financial results for the companies that create them.
  • Employee retention: Peer-to-peer recognition does more than provide emotional validation. It provides emotional depth, especially in deepening the relationships at your company. This leads to longer employee retention and better job performance, keeping employee morale high. In other words, peer recognition for one employee can improve morale for all employees.

How to create a peer-to-peer recognition program

While employee recognition programs are common at over 75% of organizations, only about 41% have peer-to-peer recognition programs.

Why the disconnect? Many companies don’t know how to make recognition feel more organic at the employee level. It’s easier to initiate an employer-led recognition program and call it a day.

But what if you do want to go an extra step and include employees in the selection process of these recognition programs? 

  • Set your goals and track your results: What is peer recognition without a goal to start with? You need to begin with clear, definable objectives if the program is going to be a success. Try working from an objectives and key results (OKR) template to bring clarity to your planning in the early stages.
  • Involve your employees: You can’t do this in a vacuum. You’ll need a communication plan. But the more you do, the less it becomes a peer-to-peer recognition program. Involve employees at every step. If you’re creating an award, for example, let employees handle the nomination and the voting.
  • Avoid ritualization: An “employee of the month” program is great, especially if you have employees who regularly vote on it. But if participation is low, chances are that the peers at your company won’t value the award as highly as you’d like. Make sure that every peer recognition you hand out is the result of honest feelings on behalf of employees.
  • Announce the program and get out of the way: Whatever style you choose — such as an anonymous award nomination process — make sure that people know about it. Then, get out of the way. Let employees take ownership of the rest of the process through nominating and voting. The more you try to steer employees one way or the other, the less it will feel like peer-to-peer recognition.

Peer-to-peer recognition examples and ideas

Let’s get concrete about the ways you can thank your team with a few peer-to-peer recognition ideas:

JetBlue’s internal award nominations

JetBlue created a program in which employees could nominate a co-worker for their day-to-day contributions. Any example of extra effort was welcome. 

Once JetBlue selected a winner, the company would then share the news via its internal newsfeed and provide the winning employee with award points they could use toward prizes like dinners and travel benefits.

The program succeeds because it’s organically peer-to-peer. Colleagues do the nomination. Colleagues get the rewards. And colleagues read about what the winner did to earn it, reinforcing the idea that extra work at JetBlue does not go unnoticed — either by management or peers. JetBlue recorded 14% increased engagement as a result of its recognition practices.

A dedicated Slack channel for peer-to-peer recognition

Heather Reid, a resource manager, recalled one company she worked at that used an open Slack channel expressly for the purpose of peer-to-peer recognition. 

Whenever an employee wanted to compliment another, they simply turned to the Slack channel for it. Reports Reid: “It worked like magic for us and encouraged a supportive, appreciative, and closely knit group.”

It’s a testament to the power of peer recognition that there were no financial incentives here and no prizes. There was simply a centralized location for employees to compliment each other. Sometimes, that’s enough.

How to encourage peer recognition

The easiest way to encourage peer recognition is to create an award program where employees submit the nominations. But as Heather Reid’s example demonstrates, it can be simpler than that. You might start small and create a forum where workers can praise each other.

Failing that, consider moving on to incentives. You can still create peer recognition meaning with programs that involve prizes from leadership or even corporate points, as shown by JetBlue. The important thing is that the process of highlighting and selecting the right employee to award should be left to their peers. 

It creates a different dynamic at work when you feel welcomed, appreciated, and recognized. And although effective leadership can accomplish a lot, there’s nothing that can quite replace the feeling of being honored by your peers.

Employees can’t recognize each other if they don’t know what other people are working on. Boost transparency and get started with Wrike today

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