Peer recognition ties in nicely with the trend in performance management that emphasizes frequent feedback and ongoing communication over the traditional, once-a-year-approach. Peer recognition has a strong "feel good" element and while that's not always a good thing, in this case it's a signal that we're tapping into a core human desire to bond as a team.
Of course, peer recognition goes on all the time, whether it's formally encouraged or not, and some companies have such a strong culture of teamwork that a formal program is unnecessary. However, for many organizations investing in peer recognition can go a long way.
If you're in the process of reforming performance management, you might find a peer recognition system is an easy and natural support for that transition.
Face the limitations first
If you promote the idea of peer recognition you'll undoubtedly run into skeptics, so let's deal with the limitations of the method upfront. You can expect to hear people dismiss peer recognition as just another form of groups singing "Kumbaya" or, more cynically, that it will become a place where employees say, "I'll recognize you, if you recognize me." While these are valid concerns, these potential drawbacks are not especially harmful if some good comes out of the program.
Peer recognition won't fix a toxic culture or overcome a bad business strategy. If leaders promote peer recognition because they don't want to face up to the real issues, that's a legitimate concern and a more serious limitation on this type of program.
As long as you position peer recognition as a useful add-on to your existing performance management and reward programs, rather than a major intervention, you shouldn't face much resistance from skeptical managers or employees.
Peer recognition should be an add-on to your existing performance management programs
How peer recognition improves morale
Now that we've accepted the limitations, let's consider the positive side of peer recognition. The most obvious benefit is that it will improve employee morale. People like an occasional pat on the back and peer recognition programs can help encourage staff to acknowledge the good work of their colleagues.
Some managers aren't as active in giving praise; they often believe that no news is good news. Peers tend to be more willing to share positive feedback than these managers. We know that it's important to say three or four positive things to an employee for every one criticism. Peer recognition is one way to help achieve that ratio. However, this doesn't let managers off the hook from giving positive feedback!
Since improving morale is one of the main goals of peer recognition, it's important that the program be fun for everyone involved. Take off your serious, professional hat and put on a party hat. After all, peer recognition is about celebrating each other's work.
How peer recognition improves performance
Beyond the goal of improving morale, peer recognition programs can be designed to encourage specific valued behaviors. For example, a retail organization might want to reward employees who handle difficult customers well. The organization might target this behavior as one to be recognized. In fact, the organization might design the program so that a particular set of desired behaviors are eligible to be recognized.
One thing we know about feedback is that it should be as specific as possible. So, rather than one employee simply giving another recognition for "Dealing with difficult customers" it would be better if they highlighted the specific incident (e.g. "The angry lady making a return Tuesday morning") and what the peer did that was particularly notable (e.g. "Took her to a quiet part of the store where she wouldn't disturb other customers").
The peer recognition system can be designed to encourage desired behaviors and include enough detail that it is provides effective feedback. You can change the design from time to time so that staff focuses on different skills or behaviors over time.
Implementing peer recognition
There are now web-based platforms designed to help support a peer recognition program. It's certainly worth looking at these solutions to help facilitate more active participation. It's important to remember that the technology is just a support system - it's not the heart of the program. If you focus on the technology rather than the human side of the program you risk it going wrong.
In smaller organizations you can build a peer recognition program around an old-fashioned cork board where people post notes to highlight what their colleagues are doing right. Tech is great, but don't let the lack of tech slow you down.
Peer recognition programs have a lot of upsides and few downsides. If you don't have one, it's an option worth looking into.