Employee Engagement Employee Recognition

7 benefits of a peer to peer recognition program – and how to do it right


It isn’t enough for you to appreciate your employees. They need to appreciate each other.

While recognition from leaders and managers is essential for employees, a peer-to-peer program can help take your efforts to the next level, and truly ingrain recognition into your culture.

After all, your employees spend at least one third of their work week interacting with their colleagues. As such, it's critical that they have positive workplace relationships where they feel supported and encouraged to do their best work. Having the tools to recognize their peers on a consistent basis empowers them to show their teammates how much they value them, build connections, and collaborate more.

In this post, we’ll talk about why peer-to-peer recognition is important, the challenges involved in building this kind of program, and how to do it effectively.

What is Peer-to-Peer Recognition?

Just in case you’re unfamiliar with it (or confused about how it differs from other kinds of programs), let’s talk briefly about what a peer-to-peer recognition program actually is. 

Essentially, a peer-to-peer recognition program is an organized system that allows an employee to send recognition for good work to anyone else in their company. This recognition can be either monetary (coming with a reward attached like points or a gift card) or non-monetary (a simple message without a reward).

Some companies with formal recognition programs in place don’t include peer-to-peer recognition, and only allow managers and other leaders to send recognition to employees. This isn’t necessarily a bad thing, and can often be a better choice for companies with limited budgets or other constraints. We often recommend that clients start out with this kind of program, before scaling up gradually after they see results.

When you do have the capabilities, however, expanding your program to allow everyone in your company to send recognition can really help to supercharge its impact, and take your efforts to the next level.

Benefits of Peer-to-Peer Recognition

Peer-to-peer recognition programs can have numerous benefits, ranging from more intangible improvements in morale and the general work environment to more visible impacts on bottom-line metrics like retention and productivity. Here are six of the most pertinent returns your organization might see from running this kind of program.

1. Peer-to-peer recognition boosts 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 year-end or holiday recognition and milestone programs, as well top-down recognition with spot rewards from managers.

A peer-to-peer recognition program, however, is much more effective when it comes to getting people excited about their jobs. 57% of HR leaders who introduce peer-to-peer recognition report increased levels of engagement, over 10% more than those who opt for other kinds of recognition initiatives.

At a basic level, all people want social acknowledgement from those around them. When they receive appreciation from a variety of peers on a daily basis, it promotes a genuine sense of belonging, which feeds engagement.  


2. It increases employee satisfaction

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

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

3. It improves retention

While a top-down 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. 

And by nurturing those relationships, you improve your chances of keeping your people. Peer-to-peer recognition programs have been shown to improve retention for 28% of companies who introduce them, compared to 21% of those that don’t.  

4. A peer-to-peer program can help you showcase your company culture

Another great thing about a lot of peer-to-peer recognition programs is that they offer opportunities for public recognition. Recognition software programs will offer a lot of social tools as part of the platform, such as a public dashboard showing recent recognition in the system, leaderboards, and even gamification features like the ability to run prize draws.

These tools can allow your leaders to use your program to showcase your company culture internally. At Guusto, for instance, we highlight recent recognition at every company all-hands meeting, run draws for additional spot prizes, and offer rewards to top recognition recipients and senders every month.

This helps us to build a sense of unity and belonging at our company, reinforce the behaviours we want to see from our people, and foster a culture of gratitude and appreciation.

5. It promotes collaboration

An important piece of peer-to-peer recognition is its impact on team unity and collaboration. Simply put, when an employee knows their efforts are appreciated by their colleagues, they’re more likely to help them out. 

Peer-to-peer recognition promotes accountability and achievement at a team level, makes overcoming roadblocks a collaborative effort, and gives employees a way to celebrate successful projects together.

Given that companies that promote collaborative work have also been found to be five times as likely to be high performing, this could be a big win for your company.

6. It empowers employees

One of the more intangible but underrated benefits of a peer-to-peer recognition program is that it gives your employees a voice. 

Managers and leaders have lots of ways to show their employees they appreciate them through performance reviews, salary increases, and other feedback and rewards processes. Employees don’t get the same opportunities. They might think the world of their colleagues, but they have know way to voice it. Peer-to-peer recognition gives them that opportunity, and lets them highlight what makes an impact for them in their team’s work.

7. Peer-to-peer recognition drives results

While these are all great reasons to introduce peer-to-peer recognition at your company, perhaps the most compelling benefit of this kind of program is the effect it can have on performance.

A study found that companies with peer-to-peer recognition programs were 36% more likely to see improved financial performance than ones with manager-only recognition programs. While there may be other factors that influence these results, it’s surely no coincidence that having a more engaged, collaborative workforce would pay off when it comes to the bottom line.

How to Build a Peer-to-Peer Recognition Program

So if you’re sold on the benefits of peer-to-peer recognition, how do you go about putting a program in place?

Here’s a few simple steps to plan, launch, and run your program effectively.

Define your goals 

Begin thinking about how you would like to get started on peer-to-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 will help set you up for success. 

Some common goals for peer-to-peer recognition programs might include increasing employee engagement, strengthening company culture, improving morale, or boosting productivity. These broader organizational goals will act as your North Star metrics, helping to keep you focused on the wider benefit you want the program to bring to the organization.

However, it can sometimes be difficult to tie some of these larger goals to your program in a measurable way. That’s why we’d also recommend having a few more tangible KPIs for the performance of your program, such as participation levels. This will help you demonstrate the program’s popularity, and help you strengthen the case that it correlates with larger organizational successes. Check out our blog on measuring the success of recognition to learn more.

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, and ended up committed to expensive software on a long-term contract, leaving less money on the table to actually recognize employees. 

Peer-to-peer recognition can get expensive, particularly at big companies, so conducting a cost estimation is vital to ensure that there’s no risk of overspending or a negative ROI. And while you would ideally give every employee a budget for rewards, that budget won’t have an impact if it's too low to really be meaningful.

In these situations, we often recommend non-monetary recognition options like our Shoutouts program as a better alternative. Rather than giving a really low budget to every employee and limiting how much they can actually use the system, non-monetary peer-to-peer programs allow employees to recognize each other as much as they want. And since you’re only paying a small subscription fee for each person, you can use the money you save to supplement your program with larger, more meaningful spot rewards. 

At the end of the day, your ideal program is one that your people will actually engage with frequently, rather than one that they see no value in and never use.

Determine the right peer-to-peer recognition program for you 

Keeping your budget in mind will help to determine what peer-to-peer recognition software works best for your team, and determine whether you need a program with non-monetary recognition, one with rewards budgets, or a mix of both.

Most likely, you’ll want to at least have some scope to send rewards, even if most of your program is non-monetary, and it’s important to look carefully about what different recognition providers offer in this regard. Do the rewards provide good value for money, or are there large markups and hidden fees? 

It’s also important to keep your work culture in mind, and make sure there is enough variety in rewards that everyone gets something they really want. A 55-year-old executive might love a set of new golf clubs, for instance, but a 20-year-old cashier won’t. Likewise, a younger employee might be excited to get a set of AirPods, but older employees won’t even know what they are. In most cases, variety and flexibility are key.

Another aspect of choosing software that’s particularly important when it comes to peer-to-peer recognition programs is how visible the recognition is. You want a program that makes recognition as public as possible to drive participation and enthusiasm. 

This can mean different things for different companies. For companies with mostly desk-bound workers, it might mean having a visible dashboard in the program itself, or integrating with messaging apps like MS Teams. For those with more frontline and deskless employees, it might mean having printable delivery options that can be placed on a notice board.

Most importantly, your peer-to-peer recognition program needs to be easy to use and understand. Your program won’t be successful if participation simply feels like more work. 

Get upper management on board 

Once you know what you want, you’ll need approval from your leadership team to move forward. You’ll want to do everything you can to make  the case for recognition to executives, showcasing its benefits, the resources you’ll need, and what results you can expect.

Keep in mind that you shouldn’t just be aiming for approval from your leaders – you want them to fully buy in and support you. Senior staff can be key to promoting and building excitement for a peer-to-peer recognition program, so it’s important for them to be involved in the setup and implementation process as much as possible. 


Set up a team

Once you have approval to press ahead with peer-to-peer recognition, the next step is to form your star committee. Regardless of the size of your company, appoint a few people who can help develop, implement, and manage the program smoothly. 

Your dream team might include you or another people leader to oversee the program, managers and leaders, and people from finance and admin. It might also be worth including some employees at different levels to provide input and feedback. This team can act as internal advocates for peer-to-peer recognition, helping to train people to use the system and building hype among your team.

Encourage participation 

Along with the rest of your team, you can work to get your employees excited about the program. Explain how peer-to-peer recognition works, 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 employees to use it themselves.

Measure and revisit

Successful implementation is only the beginning. As with most new initiatives, be sure to have a timeline in place to measure the impact of your program after it is well established. See how you are tracking against your goals and KPIs at regular intervals, and be prepared to try new strategies if you aren’t reaching your targets.

You should also seek feedback from employees themselves, encouraging them to give their thoughts about the program in surveys and meetings. This will help you tweak your program over time and make it more impactful.

Plan your perfect peer-to-peer recognition program with our playbook

Whether you’re looking to start a peer-to-peer recognition program, a top-down program, or even just modernize your milestone and service awards, The Ultimate Employee Recognition Playbook breaks down everything you need to do, step by step. This free eBook covers:

  • Making the case for recognition
  • Building your team of champions
  • Finding the right solution for your needs
  • Setting goals
  • Launching your program
  • Measuring the results

Click here to download your copy today:

Get the playbook

Make recognition a cornerstone of your culture

If you want to delve further into how recognition can help create a positive, connected culture at your company, check out Culture is the Ultimate Advantage, where we detail how programs like Guusto help companies build work environments that drive true engagement and real results. Fill out the form below to access your copy.

**Editor's note: This post was originally published in July 2020, but has been updated to include additional examples, best practices and insights. 

Culture is the Ultimate Advantage

Set yourself apart using the power of company culture. Stand out to new applicants and motivate your team to do their best work.

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.

Related posts