Employee Engagement

4 Ways Peer Recognition Improves Retention

July 26, 2022
August 3, 2022
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By 
Catherine Tansey 
Lattice Team

What if the key to a more engaged workforce and better retention was as simple as recognizing our peers for their excellent work, creative ideas, and positive attitude? As it turns out, it just may be. 

Yet despite the significant benefits of recognition, employees receive too little of it. Data from Gallup found that only 22% of individual contributors strongly agree that they “receive the right amount of recognition for the work [they] do” — numbers that are unsurprising, considering other Gallup data reported that almost two-thirds of leaders say there’s no budget specifically for recognition

So what exactly is the value of recognition in the workplace and how can we build a culture around it? Below, we’ll take a closer look at the importance of recognition from peers as well as leaders, the tangible benefits organizations can reap by encouraging more of it, and some of the most common and effective ways to implement this at your organization. 

The ROI of Recognition 

When it comes to recognition, commending colleagues for a job well done goes beyond just providing a mood boost. One workplace engagement report found that “when employees believe they will be recognized, they are 2.7 times more likely to be highly engaged.” 

And Gallup’s 2022 report Transforming Workplaces Through Recognition found that in companies that excel at recognition, employees are “56% less likely to be looking or watching for job opportunities,” and “five times as likely to feel connected to their [company’s] culture.” 

Creating a company culture of recognition — the act of showing gratitude for others’ work, actions, or ideas — positively influences satisfaction in the workplace, too. A study published in the academic journal Psychology found that employees benefit from a greater sense of satisfaction from their job when they believe “their workplace culture…endorses gratitude.”

Research consistently shows that recognition leads to a host of benefits in the workplace, but receiving credit for a great idea or being thanked for taking on extra work doesn’t have to fall exclusively on managers; peer-to-peer recognition is important, too.

Where Recognition Should Come From

While recognition from managers may confer a sense of prestige or contribute to a feeling of heightened job security, peer-to-peer recognition has its own purposes and benefits. Gallup’s workplace recognition report found that employees want recognition from peers just as much as from their leaders.

Perhaps that’s because it’s often our peers who best understand the challenges we face in the workplace. For example, say you pitched a new potential client after weeks of ever-changing requests and evolving deadlines from your contact at the company. What’s worse, your manager was tied up with other responsibilities and very hands off during the project. After the pitch, your manager tells you, “Great job! I think they were really impressed!”

But if you hear from one of your teammates, “You really delivered on that pitch! I know how stressful it’s been to have all those changing requests from X client, and at times it felt like we’d never get it done. I think you really impressed everyone!” — that will potentially have a bigger impact.  

Regardless of who the recognition comes from, it’s important to ask people how they’d like to receive recognition, said Emily Goodson, founder of culture-focused HR consulting firm CultureSmart. While this might seem like a more natural conversation topic between a manager and their direct report, peers shouldn’t feel shy about initiating these discussions with each other, too. Managers can even help facilitate these exchanges by asking all their staff members to share their recognition preferences during a team meeting, for instance. Facilitating these types of exchanges will encourage more recognition and further benefit the team and workplace.

Workplace Benefits of Peer Recognition

1. It builds stronger teams — especially in hybrid environments.

You want your employees to feel connected to their team, culture, and organization, but this can be more challenging to achieve in a remote or hybrid workplace. Encouraging peer feedback and recognition can help reinforce relationships and build new connections among team members, regardless of where they’re working.

The Gallup research showed that individuals who receive peer feedback at least a few times a month are twice as likely to strongly agree that they have meaningful connections with their colleagues. And strong peer relationships can positively contribute to psychological safety, which has been identified again and again as a key component of high-performing teams in research by Microsoft and Harvard Business Review, among others.

“It's no secret that staff [members] are more likely to be engaged in their jobs when they feel supported and appreciated in their work environment,” said Miriam Groom, human capital strategist, industrial and organizational (IO) therapist, and founder of career coaching service Mindful Career. “Positive reinforcement can go a long way in terms of bolstering someone's sense of self-esteem and belonging, both of which are essential to creating an environment in which people feel invested in what they're doing.”

Recognition is a way for employees to help one another feel seen and valued, and foster a sense of togetherness. “Not only does it give employees the opportunity to celebrate their colleagues' successes, but it also helps to build a sense of community and connection — both of which are essential for strong team dynamics,” said Groom.

2. It keeps company values top-of-mind.

Peer-to-peer recognition supports company culture and can keep organizational values top-of-mind for employees. And with Lattice’s Praise feature, which integrates directly with Slack, employees are prompted to align their commentary with a company value when submitting praise. 

HR professionals believe this kind of alignment between values and recognition strategy is the most effective: Society for Human Resource Management (SHRM) research found that HR rated employee recognition programs higher when they were tied to organizational values and talent strategy. 

3. It increases employee motivation.

Without adequate recognition, employee motivation is likely to dip. According to research by global talent market and workforce analyst, educator, and thought leader Josh Bersin, one of the top reasons employees feel demotivated at work is a lack of recognition.  

There is a unique sense of motivation that comes from acknowledgement for a job well done from those we respect. Being appreciated, valued, and seen encourages us to continue to do great work. 

“Peer recognition helps make employees feel more valued, and can be a great motivator,” said Groom. “When staff [members] know their work is recognized by one another, they’re more likely to go above and beyond in the future.”

4. It boosts employee retention.

Recognition boosts engagement, and, according to the Gallup research, workers who feel appreciated and recognized by others in their company are more likely to stay at an organization. 

An article in Harvard Business Review reported that airline carrier JetBlue’s peer-to-peer recognition program has resulted in a host of benefits for the business, with JetBlue’s data showing that the company experienced a 3% increase and a 2% increase in retention and engagement, respectively, for every 10% increase in employees reporting being recognized. 

And it’s not just that recognition positively influences retention; a lack of recognition negatively affects retention. The Gallup research found that employees who only received recognition from their peers a few times a year are 39% more likely to say they don’t plan on being at the same organization in one year. 

Types of Peer Recognition Programs

Recognition programs come in a variety of different forms. As you develop or refine the recognition program at your organization, consider incorporating the following popular strategies.

  • Nominations: Including employee nominations as part of a recognition program is a great way to tie employee appreciation to behaviors that correlate to your company values. For example, a company that has a value of “Put customers first” might have nominations for Most Creative Customer Problem-Solver or Friendliest Customer Service Agent. Nomination programs are flexible, and can easily be adjusted to accommodate budget, or to focus on the team rather than the individual.
  • Praise: Use a tool like Lattice to give praise to coworkers for a job well done. Lattice Praise integrates directly with Slack, so you can celebrate successes and share employee appreciation for everyone to see. And Lattice Praise makes it easy to share casual, impromptu peer recognition, and can help bolster a culture of feedback
  • Rewards or Points Programs: Rewards or points programs allow employees to earn points from the recognition they receive. Over time, they can redeem points for a gift card or other selection of their choice. Companies that opt for points programs often use a third-party platform to facilitate the process, like WeGift or eGifter Rewards

Promoting Peer Recognition

Positive recognition is contagious. The more praise and recognition you have in the workplace, the more you encourage a culture of recognition. But this has to start somewhere, and that somewhere should be with leaders. 

“Managers have to model giving praise for the peers to see,” said Goodson. One of the ways she has worked to model praise with her teams is through a “shout-out” ritual at the beginning of meetings. 

“I would start and shout-out someone on the team, then maybe the recruiter would jump in and give a shout out to the People ops person, and so on,” she said. “Leaders have to ask themselves, ‘If [we] want to build a culture of praise, how do [we] model that?’” 

Additionally, it helps to select a peer recognition program that naturally encourages engagement. For example, JetBlue’s peer recognition program allows employees to cash out their points for rewards, which contributes to high employee engagement as the employees are active participants in the program. 

Lastly, offer more than one form of peer recognition program at your company. You could keep physical thank you cards around the office, while using a technology platform that allows employees to give praise to one another, and holding quarterly awards ceremonies where peers can nominate one another for various accolades. Just as employees have preferences when it comes to receiving praise, some may have preferences for giving it as well — so offering several different options means your organization will be more likely to meet the preferences and needs of all your employees.

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Recognition may seem like a small gesture but it holds enormous power to positively influence workplaces — and this effect is only magnified when peers contribute to positively acknowledging their colleagues. The praise we receive from managers and leaders is powerful, important, and affirming, but praise from our peers can carry more personal significance. 

Promoting peer recognition in the workplace doesn’t have to be complicated. Managers can start by modeling the behavior for their staff members and making recognition and praise a part of team rituals and meetings. Technology can be useful, too. Lattice Praise makes it easy to celebrate colleagues’ wins and share appreciative feedback directly in Slack. The ultimate goal is simple but impactful: Express gratitude and encourage appreciation for excellent work, and employees will do the same.