The Postive Side of Peer Pressure

usiness is a team sport. Build an energized team and you’ve got an energized business. A manager can assemble a team, set goals, provide training, offer incentives, even threaten punishments but research by Harbert fellow Paul Black suggests a better, simpler way: peer recognition.

Recognition for hard work or outstanding achievement is not a groundbreaking idea. Businesses have been highlighting an “employee of the month/year” for decades. However, Black points out that more than giving employees a pat on the back or a pay raise, peer recognition adds social fuel to company culture through smaller, personalized acknowledgements. It gives employees a way to say to each other, “I see you. Good job, thanks.”

According to Black’s study, commendation directly from colleagues boosts camaraderie and collaboration especially when it comes from those who are close (the employee’s “in-group”). To be effective, however, peer recognition must be done right.

“If you’re a junior analyst at a firm,” Black says referencing his collegue’s research, “and all the junior analysts use the peer recognition system, then you’re more likely to collaborate and the system is effective. But if your group does not use the system—say you’re a senior analyst and none of the senior analysts use it—that sets the tone at the top.”

While all that is required for peer recognition to occur is for a colleague to tell their coworker “great job” or “thank you” some systems are set up like a social media platform where users can send short comments or messages within the software. Some systems even allow employees to put their money where their mouth is and send small monetary gifts or gift cards to fellow workers. These honorary tokens make little difference in employee salaries; but, Black says the incentive is not to one-up each other’s pay scale, but to add to the bank of team spirit. Importantly, happy employees contribute to financial success for the company.

There is a caveat to PRSs, however, that could cause a cultural backfire if you’re not aware. Black’s follow-up study points out that if the chosen platform uses a leaderboard or ranking system which publicly displays levels of employee recognition, it may result in hard feelings or lowered self-value among employees. Comparison is the killer, and PRSs should be careful that they don’t come across as a popularity contest, Black says.

Personal recognition systems have gained momentum at companies like Google and Intuit. And even if your company isn’t a multi-tiered corporate empire, having a PRS in place may still be of benefit. Black has observed smaller scale companies with fewer than 50 employees have found success, as long as the type of system chosen reflects the style and behaviors of the company culture. A quick search will turn up a variety of software systems fine-tuned to the needs and quirks of your employees. Give it a try and let Harbert know what you think.