When was the last time you received positive feedback from a team member? Did that feedback change how you felt about your work and your job?

One simple way to improve team performance is to encourage recognition with a peer-to-peer program. Research has shown that high-performing teams share 6x more positive feedback, while low-performing teams share 2x more negative feedback than average teams. If you are trying to create a case for investing in this type of program, we are here to share eleven benefits of peer recognition programs. We surveyed over 20 CEO’s, executives and HR leaders who have implemented peer recognition in their organization to get their take.

What Is Peer-To-Peer Recognition?

Peer-to-peer recognition leans on employees to celebrate each other. Many organizations take a top-down approach to recognition, but that leaves many team members out of the recognition loop.

You can only recognize 12 people a year for Employee Of The Month. Top-down awards that celebrate a ton of people can lose the meaning we originally associated with them. If you gave away five awards for Employee Of The Month every month, your employees wouldn’t feel better; they’ll feel placated.

Peer-to-peer recognition calls on everyone in your organization to step up and share praise. We know the value of a job well done, and acknowledging that is important, especially when it follows our work love language. There is no need to put undue stress on managers and executives to be the only ones giving praise and recognition. Your entire organization can work together to improve team morale and appreciation.

What Is An Employee Recognition Program?

An employee recognition program is a well-oiled system your organization uses to share praise and feedback. The most successful companies take a 360 approach to staff recognition instead of focusing solely on top-down awards. These companies mix peer-to-peer programs with traditional recognition programs to create a more holistic employee engagement strategy.

In order to achieve this 360 approach, your recognition program should include feedback from executives, managers, peers, and even customers if possible. By allowing various people to recognize employees, your team can truly begin to see how valued they are at your organization.

Why Are Peer-To-Peer Recognition Programs Important?

So, you might be wondering why peer-to-peer recognition programs are so important. At Nectar, we obviously focus a ton on this type of recognition over other forms. Most companies focus so much on top-down recognition from executives and managers that they forget to focus on building peer connections. We help you bridge the gap between what your company currently does and what you want it to do. We have reached out to companies across the globe to discover how their peer recognition efforts helped them build amazing organizations. Here are some of the things they’ve had to say about the benefits of peer-to-peer recognition.

1. Increases Employee Engagement And Motivation

What if you could supercharge your employee engagement without having to lift a finger? Giving employees a chance to recognize each other on a public and consistent platform has an enormous effect on employees.

Instead of waiting for the once-in-a-lifetime opportunity for staff members to be recognized at your company, recognition can happen anytime, anywhere. Your people will know that you value their work year-round and that any activity can be worth recognizing. According to Nebojsa Calic, founder of CyberCrew, “Peer recognition makes employees willing to go the extra mile when it comes to doing their daily tasks.” If you want to encourage this behavior, you have to recognize it!

Are you so focused on awards like salesperson of the year that you stop noticing all the small things your employees do for you during the year? When is the last time that you praised your team for their work? If it’s been a while, it might be time to invest in a different system.

There are many activities worth recognizing that might not rise to the level of Employee Of The Year. Make sure that you have a way to recognize those small improvements like taking extra care on a new client account and restocking the coffee on a particularly grueling day. Something as simple as saying thank you, or using Nectar’s recognition feed to shout out to someone who really stepped up can make a huge difference.

2. Reduces Employee Turnover

Many companies struggle with employee turnover, and this keeps their company from progressing. If you lose two employees every time you gain one, you’ll never grow as an organization. Smart companies know that they need to create engaged employees who stay with their companies for longer periods.

Low employee turnover translates into dollars and hours of energy saved. According to researchers published in the Journal Of Service Research, companies that can keep their turnover low pocket 4x more profits than companies with high turnover rates. Focusing energy on turnover reduction makes financial sense.

Peer-to-peer recognition is consistently cited as an easy way to reduce your employee turnover. As Sonya Schwartz, founder of Her Norm points out, “Peer recognition reduces employee turnover by building loyal employees. An increase in effective communication can build real professional relationships, and colleagues enjoy working together.” This loyalty, along with feeling valued at work, keeps employees from looking for work somewhere else.

“In our employee surveys, many employees cite our peer-to-peer reward system as a standout part of their role, and it has helped us retain some of our staff.” – Jenna Carson, HR Director at Music Grotto

3. Brings Unsung Heroes To Light

Many unsung heroes are going undetected at your organization. The unfortunate truth is that managers might never get to truly invest in every employee, especially as organizations get larger. One-on-ones become less frequent, and staff members aren’t able to get the praise they deserve.

According to Employee Benefit News, 40% of employees are feeling unappreciated for the work they’ve been doing during the pandemic. For teams that aren’t used to operating remotely, the lack of office interaction is often accompanied by a lack of appreciation or praise for the work that is happening. As Magda Klimkiewicz, HR Business Partner at Zety, points out,  “With most businesses still operating in a remote capacity, employees might feel their work goes under-appreciated or even unseen. That’s why peer recognition is an essential component of the success of any business, especially when it comes to remote teams.” Bridging the gap between remote workers and helping them feel more connected and appreciated can help with a lot of problems.

Companies have a unique opportunity to step up to the plate and share recognition when it’s warranted. The best part? You don’t have to be the one to do it all. According to Janelle Owens, HR Director at Test Prep Insight, “Allowing colleagues an avenue to recognize their coworker for a job well done serves to spotlight their hard work that might have otherwise gone unnoticed.” You can lean on other staff and other company leaders to recognize who is engaged and deserves more attention. It’s as simple as using recognition apps like Nectar to handle this process.

Nectar gives you access to a robust dashboard and tons of knowledge on your employees. From there, you can begin to uncover the truth behind the most engaged people at your company. Are you using employee engagement data to your advantage as a company? If not, it’s time to start.

“Peer recognition allows employees to take the reins of a system normally meant for managers. By allowing employees to nominate each other for recognition allows me to see who is excelling and stepping up to the plate for the company,” – Matthew Payne, CEO of Go Text Blast

4. Boosts Collaboration And Camaraderie

When you hire a new team member, they typically acclimate quickly, and find their circle of friends. Breaking up friend groups and getting them to work with other employees can be a challenge. Programs like Nectar give your team the ability to see what’s happening across the organization and to create new connections, without feeling forced.

Maybe that person in marketing isn’t so bad if one of your work friends finds them helpful? Peer programs open your employees up to new possibilities, colleagues they can depend on, and people they can trust. The more collaboration you can encourage, the easier it will be to solve problems as they arise.

If your company is like most organizations, you want to encourage teamwork. Collaboration has become a larger part of work-life. In fact, teams spend 50% more time on collaborative work than they did five years ago. This statistic should be considered a welcome change if your team works well together.

Peer-to-peer programs are perfect for building the spirit of collaboration within your company. As Lydia Nichols, Growth Manager at Grow Therapy points out, “Traditional recognition programs can increase competition between peers. When peers celebrate peers, it introduces a spirit of collaboration. It gives everyone a “fair shot” and encourages team players.” Instead of fighting for one trophy at the end of the year, the programs we build help bring people together. The possibilities are endless when your employees have new points to give out every month.

5. Increases Employee Loyalty And Job Satisfaction

Many millennials and Gen-Zers grew up during recessions like the 2008 financial crisis. Even though these generations can have a bad reputation, they want some stability in their lives. 

Most Gen-Z and Millennials are loyal to companies. In fact, Gen-Zers intend to stay at their jobs for six years on average, and millennials intend to stay at their companies for ten years. With stellar recognition practices, your team will be able to capitalize on the loyalty that many younger generations have.

So, what makes these generations disloyal? Actions like lack of career progression, low pay, and the absence of raises are all contributing factors that will make employees less loyal to your company.

Improving employee loyalty and satisfaction at work is the key to reducing employee turnover and improving your company’s growth. By leaning on your co-workers to provide valuable feedback, you can take the pressure off managers while improving the quality of your worker’s tenure at your organization.

“Peer recognition is a crucial part of job satisfaction and also career success because, at the end of the day, it matters what your coworkers think about you, and it is beneficial when there is evidence that people like working with you.” – Rolf Bax, CHRO at Resume.io

6. Increases Well-being

Supporting your coworkers and their well-being is essential. Did you know that 89% of employees who work at companies that support well-being rank those companies as the best places to work? By nurturing and recognizing employees, you are contributing to their well-being as employees.

Well-being is a mixture of many things: mental, physical, and emotional health all play a role in improving well-being. Recognition at work can play a huge role in the well-being of your employees, and it passes the benefits along to your company as a whole. In talking about his experiences with peer-to-peer recognition, Ravi Parikh, CEO of RoverPass, said that “There are surprising benefits to a peer-to-peer recognition program — which is why I am a super fan. This type of program increases well-being for employees, helps nurture and grow relationships, and creates positive feelings.” 

Consider the messages you are sending your employees. Are you teaching your staff more about competition than collaboration? If so, consider how this program might alleviate some of that tension and help your employees improve their well-being.

“Peer-to-peer recognition programs create an atmosphere of gratitude that strengthens our organization in multiple ways. Grateful people tend to report feeling less stress and sleeping better, so this program helps in improving the well-being of employees.” – Harriet Chan, Marketing Director CocoFinder

7. Reduces Unhealthy Competition Between Coworkers

Work isn’t all about competition and how employees can be one-upped. Unhealthy competition can lead to increased turnover and a lot of bad blood between employees. Your workers should all strive to work together to solve company problems because that’s when your company succeeds.

As Rex Freiberger, CEO of GadgetReview points out “Traditional workplace hierarchies create an unfounded sense of competition between colleagues. It becomes a crab in a bucket scenario where interactions are at best an exercise in tolerance. Peer recognition helps people break out of this mindset since they have to find something positive and give feedback on it.” Encouraging this positive interaction to become the norm at your company will reduce the unhealthy competition and increase company collaboration.

Outside of creating a recognition program, there are other ways to reduce competition. Are your managers contributing to competition with some practices like making employees fight over new clients or opportunities? If so, consider changes you and your managers can make to how you lead and provide work. Competition typically stems from the top-down. If you are dealing with large issues related to competition, it’s time to look at your practices.

“I’m a big fan of peer-to-peer recognition. I think it helps avoid a lot of the major problems that can happen in any organization, where employees feel the need to compete with their colleagues instead of supporting them.” -Dan Bailey, President at WikiLawn

8. Creates A Positive Work Environment (Especially With Remote Teams)

In addition to removing unhealthy competition, peer-to-peer programs give your team a positive work environment. This is especially critical when so many teams work from home at this point. The sudden transition from in-office collaboration to remote work can leave teams feeling disjointed and isolated. Connecting with a remote team can be challenging, and it’s not always easy to build a solid relationship within your organization when you may not ever see the people you are working with.

You’d be surprised how praise can turn your team around and impact your company culture. When we asked CEOs and HR leaders how peer recognition has positively affected their culture, all of them shared that it positively impacted their culture. Martin Seeley of NextDay Mattress said “As a CEO, I’ve seen peer recognition create positive communication that drives employees to share ideas. This acknowledgment creates a positive environment that your team will love.” Manager-only recognition can only do so much for organizations. We need the added layer of support from our colleagues.

“We’ve found that by having a platform where our staff members can reward each other for tasks – big and small – throughout the day keeps the environment positive and everyone connected despite the distance.” – Gina Curtis, Executive Recruiting Manager and Trainer / Coach at Employment BOOST.

9. Breaks Down Departmental Silos And Hierarchical Boundaries

Hierarchy is great because it establishes boundaries and keeps lower-level employees from facing outward consequences. It can also improve the chain of communication. Hierarchy can create a lot of tough situations for companies and employees, though.

Does your company function like a pyramid with lots of decrees and orders coming from the top? Are your employees actually able to speak their minds and share their opinion? If they do, are those opinions treated as important? Are you treating employees like low-level workers instead of the experts you’ve hired? Many organizations struggle with creating too many hierarchies and not enough cross-departmental work.

It can be challenging for any of your teams to connect and understand each other. Each department has its own lingo and way of doing things. The best companies work together, no matter what. Breaking down departmental walls helps your team move forward towards a greater good: your organization’s mission.

Peer programs help your team see all the positive things coming from different departments. Even if your people don’t work together or interact, they’ll be able to see the value others are bringing to the company.

“A peer-to-peer recognition process helps in removing the hierarchical boundaries in an organization. It helps to put in action when people say, we have a flat structure.” – Saurabh Jindal, Founder at Talk Travel

10. Boosts Morale

Low morale has a huge impact on the workplace. Low morale can cause issues like absenteeism, poor performance, and active disengagement at work. There are few things more demoralizing than working hard on a project and not getting any recognition for your effort. Organizations don’t have to suffer from staff members who hate their work or feel demoralized. Instead, use programs that allow workers to appreciate each other and drive engagement.

If you are looking for a quick morale booster, a quick thank you or public praise can do the trick. Many organizations struggle with boosting morale in this way because it requires constant communication. It can be challenging to share praise exactly when one employee needs it and to not miss out on other employees. 

Giving more people the option to share praise improves the likelihood that you’ll get to your employees in time to make a difference. Carter Seuthe, CEO of Credit Summit, has seen success in implementing this with his company. In reflecting on his experiences, he said “A peer recognition program has given our employees the chance to reflect not just on the progress of their colleagues but also their own. It’s improved the morale and overall mood of the office, as well.”

11. Promotes Core Values

Most companies set core values, but it can be hard to make sure people live core values. According to data from Gallup, “only 27% of employees strongly believe in their company’s values.” This statistic is extremely troublesome because so many organizations tout their values externally.

Team members don’t need to be devout to their company’s values, but keeping them front and center with a recognition program can help your team become more comfortable with them. Tying the core values to recognition and praise will also make the core values feel more applicable in day-to-day business operations.

Peer recognition programs are universally loved for this reason. When asked if leaders would be likely to implement a peer recognition program at their next company, 90% of our audience said it’s extremely likely. These programs are one of the best ways to promote core values so that your team is doing what they say they will do.

How To Get The Most Benefits From A Peer-To-Peer Recognition Program

Now that you know the benefits of peer recognition, you might be wondering how to get the most benefits from your program. All of these positives are great, but if you can’t implement your program correctly, you won’t see these amazing results. Here are a few tips to help you get the most out of your program:

Get Company Buy-In

Start by getting company buy-in from leaders and employees. Let your team know why you are doing this and what you hope to get out of the program. If you can’t communicate your desires, you can’t expect your employees to take this initiative seriously. Get your team excited so they are willing to take ownership of the program and make it a success.

Create your program (or use a tool like Nectar.) While you are setting up your experience, connect with company leaders like executives, managers, and tenured employees. Get their feedback on the system and how it can improve company culture.

You should also set up a team of ambassadors within your organization. Ask them to share at least three pieces of feedback using your program in the first week. This will get everyone on board quicker. Some people may feel a little hesitant at first because they don’t know what to say, but having some designated starters can alleviate that pressure.

Actually Use the Program

Once the program is launched, make sure you find ways to use it at least weekly to share feedback across your team. Show your team what it means to provide excellent feedback with the program by being one of the first to use the software you choose. Add giving recognition to your calendar every week. Taking a few minutes to share what’s on your mind will help build your program.

Analyze And Utilize

After you get a month of feedback in the system, start analyzing the system and sharing extra rewards based on the system’s impact. Be sure that you recognize people who are giving recognition frequently.

You should also discuss results with managers and executives. If you notice people who get a lot of praise (or no praise), let team leaders know. You could be spotting signs of unhappiness or employees who should be promoted.

You have so much data in your hands from the information you gather. It’s worth sharing that with people who can act on this feedback.

Conclusion: You Need A Peer-To-Peer Recognition Program

If you are on the fence, give peer-to-peer programs a try. I think that you’ll be pleasantly surprised with the benefits you get from creating a strong recognition policy. It only takes a bit of energy to create a feedback program that encourages your best employees to succeed.

As a first step, do some research around recognition programs. Watch some of our customer stories to see how recognition played a role in the organizations we serve.

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