Why Top-Down Recognition Isn’t Enough + The Benefits of Peer Recognition

What comes to mind when you think of employee recognition? 🤔

It’s probably some form of top-down recognition—a manager or executive applauding or rewarding someone below them in the office hierarchy. And that’s OK! It’s certainly a good feeling to be recognized by higher ups.

But what about recognition from peers—the team members who understand the late nights, hard work, and thorough communication that went into a certain project? While a supervisor or manager definitely understands this perspective, it’s a bit different from being with them, side-by-side, on the front lines.

Peer-to-peer recognition is powerful—it’s nearly 36% more likely to have a positive impact on financial results than manager-only recognition

A shout-out from the CEO feels fantastic—but meaningful appreciation and recognition from team members is what really drives an employee’s commitment and engagement with a company’s goals.

What is peer recognition?

Let’s get started with the basics—since peer recognition isn’t often given the same amount of discussion as other forms of recognition!

Peer recognition is when employees are empowered to express appreciation for their coworkers, including their peers, managers, and direct reports. That can mean a shoutout at a team meeting from one team member to another, or a team platform to allow you to thank a colleague for their help on a project with a tight deadline, or space on your internal social media for peers to show gratitude to each other.

The Society for Human Resource Management (SHRM) notes that peer-to-peer recognition programs are the third most-common recognition programs for employers.

It’s a simple concept, right? And it can take many of the same forms as your more traditional recognition programs, whether they’re informal or formal. Recognition as a concept is showing people that you see their hard work and thanking them for it. Peer recognition is just that gratitude coming from a different direction—every direction, in fact!

Where traditional recognition programs go wrong

Traditional recognition programs are important, for sure. They’re a valuable step on the road to creating an engaged employee culture. But many of them fall into making the same mistakes! Let’s cover the big ones:

Over-valuing hierarchy

The biggest mistake? Putting too much emphasis on hierarchy. Yes, feedback from the top of the management structure is great to receive. But a leader at the top of the corporate ladder often has only a vague idea of what a worker on the front lines does every day. And that front-line employee knows it, too.

Since leaders are the ones creating the company recognition programs (once you’ve sold them on the idea), they can be naturally biased toward placing more value or emphasis on praise from higher-ups. But especially in larger organizations, employees may not spend much time with their managers and leaders.

This leads to an unequal flow of recognition—not only do employees not receive recognition from the team members they work with every day, but leaders may not be receiving recognition from the people they manage, either.

Even if you’re on a smaller team, restricting your recognition program to a top-down model can leave team members feeling like their thoughts and feedback don’t matter as much as those higher up on the team.

Team members want to recognize and celebrate each other—let them! 🎉

Letting leaders off the hook

Another all-too-common mistake in traditional recognition programs? A feeling that managers and leaders can be let off the hook for other regular recognition activities.

Sure, if you’ve got a formal recognition program, that’s a great start. But when leaders and managers just go through the official mechanism once in a while and consider their job done, that leaves many employees feeling like recognition is just a box to check off once a month. Which… not very engaging or rewarding! 🙃

When you open up recognition to be given and received by everyone in the company, recognition becomes less of a box on a checklist and more of a foundation to a great company culture.

Why you need peer recognition

This is where the power of peer-to-peer recognition comes in. It’s the most critical form of recognition for four reasons.

It’s easy to make it more frequent than top-down recognition.

There’s a correlation between recognition and employee engagement, with 84% of Highly Engaged employees being recognized the last time they went above and beyond at work compared to only 25% of Actively Disengaged employees.

When you rely only on managers and leaders to recognize employees, you’re drawing from a more limited pool of potential recognizers. If you want the full benefits of employee recognition, you need to open it up to everyone.

But most of us have more colleagues and coworkers than bosses. So the potential pool of recognition goes way up—and when you encourage peer recognition, employee engagement also tends to increase. There’s more appreciation to go around, and less friction getting in the way.

The praise comes from a deeper understanding of the work.

In my years in corporate communications, the most memorable praise I’ve received came from those on my immediate team.

"What a clean email list!” they’d say, or admire the perfect formatting in a long email. I remember these kind words because they were elements of the job my peers knew were tricky and time-consuming to get right.

But if you didn’t live and breathe email sends, as we did, you’d take absolutely no notice of the perfect bulleted list, or an expertly-crafted CTA. Sometimes I’d spend far more time on elements like these, but get praise from leadership about elements that took me less than a minute to master.

Your peers know what goes into crafting excellent work in your field, in a way that leaders may not understand.

Shout outs from peers increase engagement and retention.

It’s no secret that employees who feel valued and appreciated at their jobs leave less and are more engaged. But there’s hard data to back up these numbers, too.

JetBlue, a leader in peer-to-peer recognition, found that for every 10% increase in employee recognition (self-reported), they found a 3% increase in retention and a 2% increase in engagement. Those numbers speak volumes about the way peers can motivate and encourage each other.

Plus, while 71% of highly engaged organizations recognize employees for a job well done, the same is true for only 41% of less engaged organizations.

When you increase employee recognition at your workplace, employee engagement is sure to follow. 👏

Peer-to-peer recognition has a significant impact on the bottom line.

Considering that high-recognition companies have a 31% lower voluntary turnover rate, your company stands to save money on the costly turnover process by simply recognizing its employees!

Peer-to-peer recognition isn’t just about feeling good—it’s a proven way to boost your bottom line, too.

Build a compelling company culture with recognition

Like I mentioned above, a thank you from your manager can feel good—but it can also feel like a checked-off box on their way to the next task.

If you want to create a company culture that values collaboration, gratitude, and teamwork, peer-to-peer recognition is the most powerful way to do that.

Why? Because peer-to-peer recognition is thanking a colleague for their contributions at an equal level, no agenda or assessment required! It feels more like simple gratitude for a helping hand or a job well done.

Create connections

Encouraging peer-to-peer recognition also creates strong connections between colleagues. It helps bring teams together by rewarding collaboration and appreciation instead of internal competition. When team members know that extending a helping hand to a peer won’t go unnoticed, and will actually be praised? You’ll see a lot more helping hands going out around your team.

To build a collaborative culture, it’s not enough to just issue a directive to employees to work together. If you say that, but still reward competition, you won’t get any closer to that cultural goal. By encouraging peers to recognize each other for a job well done, or a job done together, you’re showing what actions your company truly values.

Don’t undervalue your values

And speaking of values, a peer-to-peer recognition program is a great way to reinforce your cultural values.

By recognizing and amplifying certain behaviors, you’re shining a spotlight on what your company values. It’s an easy way to prove to employees that good work is valued, and encourages them to notice the same behaviors in others and keep up their high standards.

But all forms of peer recognition are not created equal. Be sure to avoid these five catastrophic mistakes in peer recognition programs!

Peer recognition is the way to go

When recognition is allowed to flow freely around the organization—not just directed and managed from the top to the bottom—a culture of gratitude and appreciation follows.

At Bonusly, you know we love all forms of recognition—we literally wrote the guide to it, after all!

But here’s our stance: peer recognition is the type of recognition we consider to be the most important. It’s crucial to all aspects of your company—your culture, your employee engagement, and your bottom line—and guaranteed to make a difference.

Don’t make the too-common mistake of undervaluing peer recognition because it doesn’t come from high up in the management chain. After all, that’s exactly why it’s valued and needed.