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Giving Praise

Peer-to-peer recognition programs give employees credit for a job well done.

October Cover

When human resource leaders at International Fitness Holdings surveyed employees a few years ago, one set of responses caught their attention. Employees of the Calgary, Alberta, Canada-based health club group said their bosses and others could do a better job of praising and recognizing employees’ good performance apart from the feedback offered in annual appraisals.

aders took this to heart. "We wanted a way for employees to recognize each other for day-to-day behaviors that exemplify our core values—actions that their managers might not always see or capture in performance reviews," says Scott Wildeman, vice president of fitness services. "It’s the little things the workforce does that often go unnoticed that need to be recognized to really keep people engaged."

First attempts to create a peer-to-peer recognition program gained little traction. A pen-and-paper version required employees to write nominations or thank-you messages. To appeal to younger workers and spark participation, International Fitness began using a Facebook-like application that allows 1,100 employees across the company to recognize peers by posting messages to a public "team wall" as well as through private e-mails.

This software-as-a-service platform from vendor Kudos, also based in Calgary, enables employees to acknowledge peers for daily good works with points and to post positive comments to the wall. Each employee receives an annual bank of 300 Kudos points to award to co-workers. Once awarded, these points may be traded for prizes such as paid time off, gas cards or restaurant gift certificates. "People can give out points in five- to 50-point increments, depending on their feelings about a particular behavior," Wildeman says.

Employees might be recognized for helping club members exercise, helping co-workers with challenging tasks, or going above and beyond in other ways. One salesperson was recognized for helping push a member’s car out of the snow. Others are rewarded for frequently taking on extra work without complaint.

The recognition wall serves as a virtual water cooler—viewers of posts often leave their own messages. The process builds on itself as employees from different clubs weigh in with congratulations. "The social media feature hasn’t disappointed," Wildeman says. "We’ve seen good buy-in and consistent use of the program from employees of all ages."

Leaders say the Web-based recognition platform has other benefits as well. With operations in many cities, "It’s a good way to make sure you have a recognition program that is consistent," says Debby Carreau, who manages human resource functions for the company through an outsourcing relationship with Inspired HR in Calgary. "Senior managers can’t be in all those locations regularly to recognize employees face to face, so this is a good alternative." Those managers send electronic thanks to employees from smartphones using the platform’s mobile application.

Some managers find that the hosted software platform provides a better way to regularly recognize deserving employees than previous methods. "We have some who might not have been the best at walking around and praising their people, but who now have a system where, a few times a month, they can sit down" and award Kudos points, Wildeman says.

A Kudos subscription starts at $49 plus $1 per user per month, in addition to any setup or customization fees.Expenses for prizes given in return for accumulated points are handled separately.

Momentum Gains

Peer-to-peer recognition programs have gained favor in a poor economy where pay increases remain fairly low. Business leaders see these initiatives as a cost-effective way to boost the morale of workers who’ve been asked to do more with less or who may only receive pats on the back during infrequent performance reviews.

More employers appear to be using social media-like technologies to increase interest and participation in these programs.

In a March study by the St. Louis-based Incentive Research Foundation of 205 incentive providers, suppliers to the incentive industry and corporate incentive travel buyers, 74 percent of respondents said they offered their customers social media tools or techniques to enhance their incentive programs.

In its 2011/2012 Talent Management and Rewards Study, consulting firm Towers Watson found that 35 percent of U.S. respondents and 26 percent of global respondents reported having "social recognition" programs, defined as those that allow employees in nonmanagerial or nonsupervisory roles to give spot bonuses and recognition awards to other employees.

Of companies deemed "financially high-performing" in the survey of 1,605 employers, 40 percent reported having social recognition programs, compared with 25 percent of low-performing companies, says Laura Sejen, global practice leader for rewards at Towers Watson.

The data show "growing prevalence of this type of recognition plan—peer to peer—that has really only emerged in the past three to five years," Sejen notes. Peer-to-peer recognition administered through social media-like software can benefit companies where managers with large spans of control struggle to find time to recognize employees for unsung but essential efforts, she says.

"Recognition programs at their best reward daily contributions that are beyond what is normally expected in a timely way—close to when the behavior happens and not months later," she adds. "Your immediate workgroup often has more interaction with you than a manager, and co-workers are in a good position to observe and recognize top performance."

Making It Work

How do you convince busy employees of the value of taking time out of hectic workdays to recognize peers? Online platforms with social media elements can help trigger participation, say HR advocates of these tools. Furthermore, employees comfortable with Twitter or Facebook often welcome the chance to recognize peers on public walls.

Pitfalls can include managers objecting to spot recognition given to employees whose recent overall performance they’ve deemed lacking, or peer-to-peer awards given for what some might consider ordinary or "expected" performance that’s part of a job description.

Towers Watson’s Sejen says HR leaders or other plan administrators must set guidelines for the types of actions that should be rewarded under peer-to-peer plans, providing concrete examples and conducting staff training if necessary.

But problems are usually the exception, say administrators of these plans. At Leo Pharma Inc. in Parsippany, N.J., Vice President of Human ResourcesRegina Donohue uses software with social media components called "Give a Wow" from TerryBerry of Grand Rapids, Mich., to drive peer-to-peer recognition. Donohue’s staff tailored the platform to fit the culture, dubbing its overall recognition program "Give a Roar" because the company logo is a lion.

The peer-to-peer recognition component of the program, called "Paw-to-Paw," is designed to reward employees who demonstrate core values, Donohue says. A Facebook-like wall acts as a virtual bulletin board where employees applaud one another for exemplifying values. HR staff members reserve the right to edit or delete inappropriate comments—yet they haven’t had to do so thus far.

A separate component called "Lion," which allows managers to award employees with spot bonuses of $50, receives more oversight, Donohue says.

"We do monitor that program more closely and approve the awards, along with the manager of the individual receiving the award, to make sure the right things are being recognized," Donohue says. That auditing provides protection from an employment law perspective, she says, by ensuring that employees who might have employee relations issues or performance problems aren’t being rewarded.

In "Paw-to-Paw," recognized employees receive e-mail notification, and the award denotes the company values the individual demonstrated, along with a narrative about why they were recognized.

Recipients also receive a hard-copy certificate. More than 276 "Paw-to-Paw" awards have been given this year; in a recent employee survey, 70 percent of respondents said they visit the recognition site at least once a month.

With about three-quarters of Leo Pharma’s 240 U.S.-based employees working from dispersed locations, the platform proves to be an advantage, Donohue says.

Skytron, a medical equipment business in Grand Rapids, Mich., implemented the "Give a Wow" platform about two years ago, after finding administration of preceding recognition programs onerous, says Dave Straw, Skytron’s vice president of operations.

Straw says younger workers quickly gravitated to the social media features, while older workers were slower to participate. Skytron includes its independent distributors in the recognition program.

One software feature that has proved popular is the "Applaud" function, Straw says. "When someone gets nominated by a peer, other people can come onto the site and ‘applaud,’ " he says.

Despite week-to-week dips in activity, Straw says participation has been consistently strong. "I attribute that largely to the fact that it’s so easy and enjoyable to participate," he says. "Employees are just two clicks away from being able to create a nomination for a peer."

Skytron’s annual cost for the "Give a Wow" platform, which covers 110 employees, is $5,000 to $6,000, along with a yearly maintenance charge of about $500.

Tracking Results

Business leaders say there can be reporting and tracking benefits to vendor systems. Many generate reports that provide a high-level overview of participation rates across a company.

At International Fitness, for example, the reports "allow me to check to see who has received the most Kudos [points], who is giving the most and what kinds of behaviors are being recognized," Wildeman says. Such reporting is beneficial in tracking award points accrued, since there are expenses tied to prizes.

Whether they employ social media technologies or not, well-designed peer-to-peer recognition plans can go a long way to boost employee morale, foster a spirit of camaraderie and create more engaged workers.

"Dollar for dollar, when we look at enabling desired behaviors, creating employee engagement and improving staff retention, we don’t think there is a more efficient or effective way to reward people," Carreau says.

The author is a freelance writer and editor based in Minneapolis.

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