Motivate employees with peer-to-peer recognition

Recognition from your manager can be a powerful motivator. But some of the most meaningful appreciation comes from your peers — the colleagues who work alongside you every day. This recognition validates your daily efforts and creates the kind of engagement that drives real business results.

A recent Auburn University study found that employees are 37% more likely to go above and beyond for their teams when there’s a peer-to-peer recognition program in place. And with incentives, they’re 1.5x more likely to work harder for managers and cross-functional team members. 

When employees celebrate each other's contributions, it strengthens their sense of connection and encourages everyone to pitch in — without constant oversight from management.        

While research shows there's only a small correlation between salary and job satisfaction, a well-crafted recognition program can reduce employee turnover by up to 43% and boost employee engagement by 40%.

While peer recognition programs can have a huge impact, they’re not always easy to implement. The key is finding the right balance of structure and spontaneity while ensuring rewards are meaningful to recipients.

So how do you build a peer recognition program that drives real business results? Read on to explore proven strategies for fostering a culture of appreciation, practical tips for program design, and examples from companies getting it right.

How to create a peer-to-peer recognition program 

Building an effective peer-to-peer recognition program requires more than rolling out an employee rewards platform. You need the right environment and infrastructure for organic appreciation to flourish.

The most successful programs make recognition easy and rewarding for both givers and receivers. They provide clear guidelines while allowing for authentic, in-the-moment appreciation.

Consider these key steps as you develop your program.

Create employee awareness and buy-in

Start by communicating your program's value to all stakeholders. Share research on peer recognition's impact on employee engagement, retention, and business results.

Run workshops to help employees understand what meaningful recognition looks like. Provide examples of specific, timely appreciation tied to company values and goals — and do the same for senior leadership. Their participation will set the tone for broader adoption.

Build a culture of recognition

Create dedicated channels and rituals for recognition. This could mean starting team meetings with shoutouts or having a Slack channel where people share praise. Regular touchpoints make peer recognition a natural part of work rather than an afterthought.

Lead by example and celebrate when employees give each other great recognition. Share standout examples in your company newsletters or all-hands meetings, highlighting what made them meaningful. When a manager thanks someone for helping with a project, point out how they tied the recognition to specific actions and impact.

Make it fun and easy

The faster and simpler it is to give recognition, the more likely people will do it in the moment. 

Remove friction by integrating recognition opportunities into tools people already use like Slack or Teams. You can even create custom emojis for your recognition program or fun badges that spotlight specific achievements.

Keep peer recognition and reward options flexible. Some employees prefer public praise while others value private notes. When it comes to incentives, most employees prefer gift cards and monetary rewards — but if you’re not sure, give employees the gift of choice.

Invest in a peer-to-peer recognition tool

Choose a platform that aligns with how your teams work. Platforms like Caroo or Bonusly make it easy to tie peer recognition to company values and automate reward delivery across teams.

Look for features that support spontaneous recognition. A mobile app lets employees give kudos on the go, while automated notifications ensure no achievement goes unnoticed. Integrating with your company’s chat tools and project management platforms helps capture recognition right where work happens.

Design clear recognition criteria 

Establish guidelines for what behaviors and achievements deserve recognition. These should align with your company values and strategic objectives. Keep criteria broad enough to capture diverse contributions while specific enough to feel meaningful.

For example, if innovation is one of your company’s core values, you could create guidelines to recognize big breakthroughs and small process improvements. Sharing real examples of recognition in each category can help employees understand what to look for. 

Track engagement and impact

After you roll it out, monitor your peer recognition program adoption across teams and departments. Address any participation gaps or barriers as they come up.

Measure the correlation between recognition and key metrics like employee retention and engagement. This data helps prove program ROI, but qualitative feedback matters too. Asking employees about their experience in a pulse survey or informal poll will help you further optimize the program.

Review and optimize regularly

Analyze recognition patterns to identify potential biases or gaps. Make changes to ensure the program remains equitable, inclusive, and cost-effective.

Adjust criteria and rewards based on employee feedback and changing business needs. Recognition programs should evolve with your organization, so don’t be afraid to test new incentives that can drive even more engagement. 

Benefits of implementing peer-to-peer recognition

Peer recognition delivers measurable business benefits across multiple dimensions. Research shows that peer recognition programs generate strong ROI through both direct and indirect benefits. Some of these benefits include:

Increased employee engagement

Employees who receive frequent recognition are ~3x more likely to be highly engaged. Simply put, regular peer appreciation creates stronger emotional connection to work.

Recognition helps employees understand that their contributions matter, which can increase motivation and discretionary effort (more time, energy, and enthusiasm).

Improved retention and satisfaction

Replacing an employee can cost up to 2x the former employee’s salary. Beyond obvious costs like recruiting and training, departures can disrupt team dynamics and project timelines. Companies often underestimate the hidden costs of lost institutional knowledge and reduced productivity during team transitions.

Meanwhile, companies with strong recognition programs see up to 43% lower voluntary turnover. Feeling valued makes employees less likely to look elsewhere — and that’s great news for your company’s culture and bottom line.

Increased innovation

Celebrating creative solutions through peer recognition inspires others to innovate. When innovation is valued and rewarded, teams tend to build on each others' innovations.

Rewards can further amplify the impact of peer recognition on responsible risk-taking, a key element of innovation. A recent study found that meaningful incentives significantly increased innovation at companies with fewer than 1,000 employees.

Strengthened company culture

Peer recognition is a great way to reinforce cultural values in the wild. Celebrating behaviors that exemplify your culture makes them more tangible to your team.

A strong recognition culture can attract like-minded talent. Candidates are drawn to environments where their contributions are valued. And happy employees are more likely to refer great candidates, making your HR team even more effective at hiring top talent.

Examples of successful employee recognition programs

Leading companies have turned peer recognition into a powerful tool for building stronger teams and boosting profitability. Here are some prime examples of how a modest investment in employee appreciation can create an outsized impact on culture and performance.

Atlassian's Kudos program 

Atlassian's peer-to-peer Kudos program powers recognition across its distributed global workforce. Employees can send rewards ranging from $25 to $500 to recognize outstanding contributions.

The program places no limits on how many rewards employees can give. This high-trust approach drives impressive engagement, with over 100,000 Kudos exchanged every year.

When Atlassian shifted to distributed work in 2020, its 12,000+ employees moved from working in 12 global offices to working from over 10,000 locations worldwide. Kudos became crucial for maintaining connection across its team. 

The Kudos program has become a key driver of Atlassian's strong culture and performance. It helped them earn a spot on Fortune's 100 Best Companies to Work For list.

Over 92% of employees report doing their best work under Atlassian's distributed model, with Kudos playing a vital role in engagement and productivity.

Cisco's Connected Recognition program

Cisco's Connected Recognition program demonstrates the power of peer-to-peer appreciation at scale. Funded at just 1% of payroll, it lets employees reward and recognize their colleagues' contributions.

The program offers multiple redemption options, creating personalized recognition experiences. This flexibility drives high participation rates: In the first year alone, 85% of Cisco's 80,000+ employees actively participated in giving or receiving recognition. 

Connected Recognition played a key role in Cisco's broader success story, helping drive 15.54% revenue growth over the last five years and multiple number-one rankings on Fortune's 100 Best Companies to Work For list.

Regular peer recognition keeps Cisco's global workforce aligned and motivated. Employees feel valued and connected across teams and time zones.

The program's modest budget delivers outsized impact by focusing on meaningful, timely recognition. The bottom line? Small rewards can add up to significant cultural and business benefits.

Drive engagement with peer-to-peer recognition

Peer recognition programs support thriving company cultures and strong business results. With turnover costing up to 2x an employee's salary, investing just 1 to 2% of payroll to peer recognition can drive significant returns through improved retention and engagement.

The most effective programs make it easy to recognize peers. Clear criteria, flexible rewards, and simple tools help create an environment where appreciation flows naturally. When employees regularly celebrate both small wins and major achievements with their peers, they stay motivated and connected to their work.

Whether you're launching a new peer recognition program or optimizing an existing one, focus on creating authentic moments for employees to share praise. The right mix of social appreciation and tangible rewards can transform your company culture while delivering real business impact.

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