Employee Engagement Employee Recognition

Why Peer-to-Peer Recognition is Effective & How to Do It Right


Fun fact - at least one-third of the work week is spent interacting with colleagues. As such, it's critical for employees to have positive workplace relationships where they feel supported and encouraged to do their best work. One great way to enhance connections between employees, is to empower them with tools to publicly recognize their peers on a consistent basis.

Social acknowledgement is desired by all humans. When employees receive public praise from their colleagues, it boosts their engagement and helps to build a creative and collaborative workplace where people love to work.

The Department of Labor and Accenture found that lack of recognition is the number one reason people leave their jobs. Although manager and leadership-led recognition efforts are important, peer-to-peer recognition is arguably more important, but often less practiced. 


Benefits of Peer-to-Peer Recognition

Boosts employee engagement 

Peer-to-peer recognition has been proven to significantly improve employee engagement. An extensive Gallup study showed that only 13% of employees actually consider themselves engaged at work. Companies’ efforts to implement recognition programs to improve these numbers often include annual performance reviews or work anniversary perks.

Peer-to-peer recognition, however, is much more effective when it comes to getting people excited about their jobs. Receiving appreciation from a variety of peers promotes a genuine sense of belonging, which feeds engagement. While upper management oversees the program, it’s important for the entire organization to be involved in both the giving and receiving end of recognition.


Improves employee retention

The ability to keep great talent around is a reflection of your company’s culture (and also plays a big role in your company’s finances!). When your top performers leave, there is a substantial cost of re-hiring and re-training.

While a traditional employee recognition program is a great way to ensure employees feel appreciated by their leaders, a program that includes peer-to-peer recognition provides even more opportunity to encourage positive work relationships. Makes sense, given that most of the workweek is spent interacting with them.


Showcases company culture

The great thing about peer-to-peer recognition is that it allows employees to participate in social rewards, which has great impacts on both interpersonal relationships and your company’s culture of gratitude and appreciation. Use your rewards and recognition system as an opportunity to showcase your company culture. Having a great company culture is beneficial to both employees and company leaders. People feel a sense of unity and belonging. Once your company culture has been established, leaders can use this existing culture as when marketing to new talent.


Increases employee satisfaction

Peer appreciation also increases work satisfaction. A study by SHRM found that peer-to-peer recognition made 90% of staff more satisfied with their work. Employees want more of it, but they don't want it coming from managers exclusively. 

Peer-to-peer recognition programs make a more significant impact to employee happiness - it’s just effortlessly inclusive. Anyone can give it, and anyone can receive it. In contrast to programs such as Employee of the Month, peer recognition is great because it is an organic expression of gratitude.


Promotes team building

An important piece of peer recognition is its impact on team performance. Encouraging employees to appreciate each other’s efforts creates a positive environment and can play a large role in effective communication. 

Peer-to-peer recognition helps teammates share the spotlight for successful projects, and makes overcoming roadblocks a collaborative effort. Most importantly, it promotes accountability and achievement at a team level. This will lead to a smoother flow of information, better and faster decision making, and higher overall productivity. 

Companies that promote collaborative work have also been found to be five times as likely to be high performing. Peer appreciation makes employees more confident in their abilities and enables them to fearlessly voice their opinions and ideas.


How to Build a Peer-to-Peer Program

Set up a team

The first step for successful implementation of your program, is to form your star committee. Regardless of the size of your company, appoint a few people who will help develop, implement, manage and establish a recognition program smoothly. 

Your dream team should include you, the HR director, to oversee the program, followed by managers, and people from finance and admin. This will help your leadership team communicate the program well to your employees, while removing the lathered workflows of approving individual gifts through finance.


Define your goals 

Begin thinking about how you would like to get started on peer recognition. Just like any other project, you must define your goals and what tasks (budgeting, scheduling, selecting system administrators, etc) need to be completed. Establishing your expectations and intended outcomes of your recognition program will help set you up for success. 

Common goals with peer-peer recognition programs include increasing employee engagement, strengthening company culture, improving morale, and boosting productivity. While these might seem vague at first, by laying out the metrics that will quantify your program's performance, you will build a program that aligns with your broader business objectives.


Plan your budget 

This is a big one. Very frequently, we hear of companies that attempted to roll out a program that didn’t fit their needs, but committed to expensive software on a long-term contract, leaving less money on the table to actually recognize employees. 

Conducting a cost estimation is vital to ensure that there’s no risk of overspending or a negative ROI. Your ideal program is one that your people will actually engage with frequently to nominate each other. You will also want an agile program that you can pilot and roll out quickly, and only implement company-wide once you see some success.   

Confused where to start? Check out our ROI Calculator to plan your budget and see where you can expect to see returns in a peer-peer recognition program.


Get upper management on board 

It’s important to have upper management equally involved in the set up and implementation of your program. Senior staff can help support the program, and can be key to promoting and building excitement for the program.


Determine the kinds of rewards and programs 

When choosing a recognition program that works for your company, it’s important to keep your work culture in mind. Does your team like going out for lunch together? Would they prefer an option to go bowling? 

It’s important to use peer-to-peer recognition as an opportunity for you to reward and appreciate employees for collaborating with and contributing in their teams. If your team includes foodies (therefore suggesting that a lunch would be better), send them a gift card to use at their favourite restaurant.

While peer recognition can be done using social media or your company website, using a platform that allows you to streamline nomination activity, track which of your company core values are the most aligned with employee behaviour, and monitor spending can make a big difference in the long-term effectiveness of your program.


Encourage participation 

Get your employees excited about the program. Explain your program sufficiently and ensure that employees know who to go to if they have any questions - and remember - it goes a long way to have senior management as advocates of the program. When the management and leadership teams use the program frequently, it will encourage higher engagement from employees to use it themselves too.


Measure and revisit

Most importantly, your peer recognition program needs to be easy to use and understand. Your program won’t be successful if participation simply feels like more work. Keep in mind, if your company is opting to use third-party software, that ease-of-use will play a huge role in its success.

Successful implementation is only the beginning. As with most new initiatives, be sure to have a mechanism in place to measure the impact of your program after it is well established. Pay attention to KPIs such as employee retention and productivity. Employee reviews and satisfaction surveys are good ways to gather data from employees themselves on their thoughts about the program. This feedback will help you tweak your program over time and make it more impactful.


Is Guusto a Good Fit For You

At Guusto, we've worked with thousands of clients who have struggled with building in-house recognition programs that were difficult to track and did not generate much engagement. We've also helped many companies transition away from expensive software that was overly complicated for employees.

Guusto makes peer-to-peer recognition simple and impactful!  Our free employee recognition platform streamlines manual processes, allows employees to nominate colleagues, provide budgets to employees, tracks all spending, and most importantly, drives employee engagement. It's not just about recognizing employees, it's about building a culture of recognition. Reach out to our team anytime if interested in learning more.

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What's Next?

One of the biggest challenges of hiring the top young talent today is adjusting to the shift in employee demands. As Gen Z enters the workforce, will they want to work for your company?

So next, we explore What the New Class of Graduates Look For in Their Employers. It will cover the following topics:

  • Compensation and benefits
  • Career path and development
  • Corporate culture and values
  • Impact and ethics

Hope you’ll join us for the discussion. Have something you want to learn more about? Let me know in the comments below or connect with me on LinkedIn.

Muucho Guusto,


Skai Dalziel

Written by Skai Dalziel

Skai is the Co-Founder of Guusto. He leads the Customer Success Team, and loves helping HR leaders build workplace culture by sharing his experiences from working with thousands of companies.