Peer Recognition: Overlooked, But Priceless in Retaining Top Talent

By 
Roshan Nair
Published on 
Apr 27, 2023
Roshan likes to dig-deep into talent topics with our network of experts to craft perspectives on most pressing matters
As social beings, we have an innate need to seek acceptance and appreciation from our community. At work, our peers constitute this community. So how does peer recognition affect employee happiness and what happens in its absence?

From offering flexible schedules and competitive salaries to organizing fun trivia nights and Office Olympics—HR leaders often go to great lengths to ensure the happiness of employees. Grand gestures are great, but what about the little things? What about the small, everyday actions and words of appreciation from peers that immediately light up someone’s day?

A study by the Harvard Business Review found that employees who received peer recognition were more likely to feel happy, motivated, and engaged in their work compared to those who didn’t. According to another recent survey, 82% of employees say that being recognized by their peers motivates them more than any other form of recognition. 

“One of the main reasons why we fall in love with our work is the relationships that we build with our peers while on the job.” 
— Igor Avidon, Founder of Avidon Marketing Group

Yet, peer recognition is often overlooked in favor of bigger, more expensive initiatives.

Despite its potential to boost employee morale and improve overall workplace culture, not all organizations understand the power of peer recognition. Of those that do, most struggle to implement it effectively. Let’s start by understanding how peer recognition works and what it does for employees.

Recognition breeds responsibility

As social beings, we have an innate need to seek acceptance and appreciation from our community. At work, our peers constitute this community. This need is wired into our brains, and it is a fundamental aspect of our social and emotional development. When we receive words of encouragement and appreciation from others, it can have a profound impact on our well-being and motivation. In fact, 92% of workers are more likely to repeat a specific action after receiving recognition for it.

Studies have shown that when we receive positive feedback, our brains release dopamine, a neurotransmitter associated with feelings of pleasure and reward. This chemical reaction can lead to increased motivation, confidence, and a sense of accomplishment. Recognition from peers is also 35.7% more likely to have a positive impact on financial results than top-down recognition.

But what happens when we don’t receive it? The absence of validation or peer recognition for our efforts may lead to feelings of disengagement or even self-doubt for some. In fact, lack of recognition and engagement is known to contribute to 44% of employees changing jobs and quiet quitting.

“A lot of people who are doing important work in organizations are going unrecognized and unnoticed… A lot of the critical work people do, especially if it’s not in their job description, is invisible to senior leaders. And it’s one of the reasons why peer recognition programs are so important.”
Adam Grant, Organizational Psychologist

A few words of encouragement or appreciation can go a long way in boosting morale, motivation, and productivity. By helping people acknowledge and value the contributions of their peers, HR leaders can create a positive, thriving workplace culture.

Even thank-you notes can reap massive results

When it comes to effective employee rewards, it's not always about shelling out big money or investing a lot of time and effort. The German utility company E.On took this to heart and implemented a recognition program that encouraged personalized and meaningful recognition. Under the program, employees are encouraged to send a “buzz”—a digital or physical thank-you note—to any colleague of their choice. 

What made this program unique was that it broke down hierarchical barriers and allowed everyone from managers to peers to recognize and appreciate each other. Even senior executives got in on the action, personally recognizing close to a thousand employees.

The results of the program speak for themselves. E.On's staff motivation score increased from 61% to 69%, the number of employees feeling valued increased from 39% to 52%, and employee understanding of E.On's business vision rose from 57% to 75%. These statistics demonstrate the powerful impact of personalized and employee-centric rewards on staff engagement and motivation.

This example from E.On is a testament to the fact that effective employee rewards don't always have to be expensive or effort-intensive. By prioritizing personalization and employee-centricity, E.On was able to achieve exceptional outcomes that strengthened their workforce's engagement and sense of belonging. It's time for organizations to take note and invest in meaningful recognition programs that truly make their employees feel appreciated and valued.

“Thanks is gratitude, and it’s so much more powerful when it comes from peers. A simple ‘thank you’ creates a very authentic, human moment that matters for two individuals… Now, if you multiply that by tens of thousands of those occasions, just think of the social fabric, the deepened relationships, how everyone is lifted up.”
Eric Mosley, CEO of Workhuman

When peer recognition goes wrong

Peer recognition can be a powerful tool for boosting employee motivation and engagement, but it's not without its potential pitfalls. One of the biggest challenges is the "illusion of transparency"—the idea that the recognition-giver's perception of recognition may not match what the receiver actually values. This leads to a mismatch between the recognition that's given and the expected impact. For example, if an employee values public recognition but their peer recognition is given privately, they may feel inadequately valued.

A report by Workhuman also found that 21% of employees reported witnessing peer recognition programs being abused in their workplace. Employees may give recognition solely to their closest colleagues or those they share a personal relationship with rather than objectively recognizing the best performance. This can lead to unfair advantages for some employees with better influence and create a toxic workplace culture where merit is not the only factor that determines recognition and advancement.

There’s also the risk of peer recognition becoming routine and losing its meaning over time. If employees are forced to recognize peers rather than being encouraged to do so with nudges, the process may become rote and impersonal. This can be counter-productive. 

To avoid these mishaps, HR leaders must ensure that peer recognition programs are well-designed, with clear criteria for recognition and built-in safeguards to prevent bias and ensure authenticity. With the right approach, peer recognition can be a powerful force for creating a positive and engaged workplace culture.

Creative ideas to get employees to recognize peers

The efficacy of any peer recognition program lies in the hands of the HR manager behind the scenes. You could get employees to use boring, generic phrases like “Good job!” or “Well done!” more often, or you could get creative with your people skills and try the following:

  1. Having "Thank you" cards that can be customized/hand-written for a personal touch and given to others (if working in office) or shared virtually
  2. Giving every employee a small budget (maybe $20 per month) to appreciate peers with small gifts that will then get delivered directly to desk (if in office) to home (if remote)
  3. Anonymous kudos box or virtual platform where colleagues can leave positive feedback for each other, which is then read out during a team meeting or shared on a company intranet
  4. Allow employees to nominate each other for recognition every month. Ensure that the same person cannot be chosen by an individual twice.
  5. Starting a "coffee roulette" program where colleagues are randomly paired up for virtual coffee chats to get to know each other better and appreciate each other's perspectives
  6. Creating a virtual or physical "wall of fame" where colleagues can post pictures or stories of each other's accomplishments and milestones

It’s the little things that matter

The good news is that you don't need a big budget or fancy tools to appreciate your peers and make them feel valued. You can go a long way with little things, such as a handwritten note, a small gift, or even a sincere word of thanks.

It's often the small gestures of appreciation that can make the biggest impact on your employees. By getting people to show each other their true worth, you can create a workplace culture where everyone feels respected, engaged, and motivated to put their best foot forward.

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About the Author
Roshan Nair
Content Marketer
Roshan is a seasoned Content Marketer who creates compelling and thought-provoking content in performance management. He collaborates with innovative minds to explore groundbreaking ideas to nurture high performance within organizations. Beyond shaping content, he's an avid language learner, an enthusiast for spicy noodles, and geeks out over nearly anything on NatGeo.
https://www.linkedin.com/in/roshan-writes/
About the Author
Roshan Nair
Content Marketer
Roshan is a seasoned Content Marketer who creates compelling and thought-provoking content in performance management. He collaborates with innovative minds to explore groundbreaking ideas to nurture high performance within organizations. Beyond shaping content, he's an avid language learner, an enthusiast for spicy noodles, and geeks out over nearly anything on NatGeo.
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