I read an article on Forbes.com a couple of months ago about the need for companies to radically change performance appraisal processes and it got me thinking about peer to peer recognition programs. The author, Josh Bersin, asserts that traditional performance appraisals or annual reviews are artifacts from the ways business was done in the past. Bersin cites many reasons why the current workforce does not benefit from annual reviews and also relates the tension created by managers thinking about completely eliminating performance appraisals. He also provides new ways managers can appraise employee performance to satisfy both employers and employees. After reading through this, I started to wonder if peer to peer recognition could potentially replace formal annual reviews. This led me to a whole list of questions I’d like to talk about in this blog post.
How would peer to peer recognition work?
Peer to peer recognition is generally done via a customized employee recognition website. Employers encourage everyone to participate and submit nominations for co-workers who have demonstrated core values or gone above and beyond a job description. Managers and employees would visit the website to submit their recognition online in the form of nominations. When a nomination is submitted, it usually goes through an approval process. After a nomination is approved, the employee is notified and the information is added to a virtual peer to peer recognition wall. Each nomination generally has a point value tied to it so that employees earn points towards rewards like merchandise, gift cards and travel options.
How would peer to peer recognition be better than formal annual reviews?
There are several reasons a peer to peer recognition program could be better than an annual review. Employees do not want to wait until once a year to hear how they are doing and where they could improve. Peer to peer recognition programs help to give employees feedback on how they are doing throughout the year. By looking at the employee recognition wall, they can see what others have done and where they could possibly improve. Traditional annual reviews involve one on one conversations only, whereas peer to peer recognition can come from everyone in the company. Since nominations and recognition are submitted in accordance with company core values, managers can see which values have the least nominations and may need to be focused on for future improvement.
How could peer to peer recognition be incorporated into an annual review?
For many companies, eliminating annual reviews altogether may be out of the question. However, starting a peer to peer recognition program could truly help with employee evaluations. By checking the nominations each employee has received, a manager could get better insight into the employee’s performance from other points of view.
Should manager recognition be ranked higher than peer to peer recognition?
I think one of the best benefits of starting a peer to peer recognition program is the democratization of recognition. In a lot of different positions, managers will not have as good of an idea of the great work someone is doing as co-workers will. Managers see the end result but don’t necessarily know the day to day challenges people help overcome. Recognition is valuable when it comes from anyone and the more recognition one receives, the better.
What would be the financial cost?
Peer to peer recognition does not have to break anyone’s budget. With Awards Network’s simple pricing philosophy, starting a peer to peer recognition program can be very affordable. Clients of ours have a wide range of costs tied to their nominations: $0.50-$500! Depending on the core value achieved, our clients pick a dollar value that makes sense to them while still making the overall program rewarding to participants. I recommend figuring $100-$300 per active participant per year for a successful peer to peer recognition program. You can also count on at least 2 nominations per year per employee on average.
For more information, you can download our employee rewards program samples.
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