How to Harness the Power of Peer Recognition 

Employee recognition can be a minefield.

One key distinction is to decide between rewarding or recognizing good performance. Rewards are a pre-determined "if-then" proposition. If you achieve X result, you get Y as a prize. 

There's a volume of data that proves rewards often unexpectedly lead to poor performance. Check out Daniel Pink's excellent book, Drive: The Surprising Truth About What Motivates Us, for an easy-to-read overview of some of the many studies that show rewards don't work in a customer service context.

Recognition can be healthy if done right. It's unexpected and delivered after the performance occurs to let employees know their performance is valued and appreciated. 

So where to start?

The Pitfalls of Recognition

Formal recognition programs are fraught with pitfalls that can demoralize employees. Take the venerable employee of the month program as an example:

  • How do you make the selection process seem transparent and fair?
  • Can you allow repeat winners without prompting feelings of favoritism?
  • What is the impact on morale of not winning?

Even informal recognition can backfire. 

A manager I know once bought his employees donuts to recognize the team for some extra effort. It was so well received that he bought donuts a week later, which quickly started a weekly tradition. 

Soon, the weekly donuts were expected rather than a treat. A few people even grumbled about not getting their favorite kind.

Remember: recognition is unexpected. The donuts no longer recognized good performance once the team expected to receive them.

While researching customer-focused companies for The Service Culture Handbook, I noticed several companies were putting a twist on traditional recognition.

They were using peer recognition to drive culture.


The Power of Peer Recognition

According to a 2014 employee engagement study by the employee feedback company TINYpulse, peer recognition is the top reason why employees go the extra mile at work.

Shawn Anchor, bestselling author of The Happiness Advantage, wrote an article for the Harvard Business Review detailing a study on JetBlue that he co-authored. This study found that "for every 10% increase in people reporting being recognized, JetBlue saw a 3% increase in retention and a 2% increase in engagement."

Coincidentally, I profiled JetBlue in The Service Culture Handbook for their employee engagement best practices.

There are a couple of easy explanations for why peer recognition is so powerful.

One is Maslow's Hierarchy of Human Needs. Psychologist Abraham Maslow developed his now famous ranking of basic human needs in 1943. They are, in order:

  1. Physiological 
  2. Safety
  3. Love and belonging
  4. Esteem
  5. Self-actualization

I've written about this hierarchy before, as a way to explain why employees provide better service (priority #5, self-actualization) when they feel like they're part of a team (priority #3, love and belonging). Peer recognition is powerful because it reinforces a sense of love and belonging.

There's one more explanation: we take our social cues from others.

Experiments by Solomon Asch and other psychologists demonstrate that we humans instinctively try to conform to the groups we're a part of. Conformity is often thought of as a negative trait, but it doesn't have to be.

Imagine a team of employees conforming to a group norm that values outstanding customer service! Peer recognition helps promote this positive conformity.


Practical Examples

I reached out to the Inside Customer Service LinkedIn group for some practical examples of peer recognition programs.

Two members shared excellent examples:

Jeremy Hyde, Customer Service Manager at UCare, wrote: "We have a 'hats off' program where people can fill out a brief form on our intranet. Then something is delivered to the Supervisor with the details on who nominated them and why with a little 'hat' pin. A lot of people put the pins on their lanyards or tack them up on their cube walls. After you collect 10 you can redeem them for a gift card."

Jenny Dempsey, former Customer Service Manager at, wrote: "At, I developed the Smiles peer recognition program. Anyone could write a note of gratitude for a coworker and drop it in the Smile box. At each CSR meeting, we would draw a few entries from the box and read them aloud. The people they were writing about would receive gift cards. The team loved it!"

Both examples are simple, practical, and don't require a lot of input from management. They're also easy to implement.

But wait! You don't even need a formal program. As a customer service leader, you can lead by example. 

Recognize your employees for a job well done by thanking them one-on-one, writing a short handwritten note or email, or praising them in a team meeting. At the same time, encourage employees to pay the compliment forward!

Even a simple "Thank you!" from a colleague can be a powerful form of recognition.

Never reward employees for outstanding survey scores

The Westin Portland is one of my favorite hotels. Their warm and attentive associates always make me feel welcome and you can’t beat their location in the heart of downtown Portland, Oregon. I’ve stayed their many times over the years and have come to feel like the hotel is my home away from home.

When I started writing my customer service book in 2011, I interviewed then General Manager Chris Lorino to learn some of the hotel’s service secrets. One of Lorino’s strongest beliefs was that you should never reward employees for achieving outstanding survey scores. He felt it was important to build a team of people who naturally wanted to serve guests at the highest level. In Lorino's opinion, a reward system would inevitably get in the way.

Both leading research on employee motivation and Lorino’s own success as a General Manager suggest that he is absolutely correct.

Rewards vs. Recognition

It’s important to differentiate between rewards and recognition. The purpose of this post is to demonstrate that employees shouldn’t be rewarded for outstanding service, but go ahead and recognize them all you want.

Rewards are if-then propositions. The prize and the criteria for earning the prize are spelled out ahead of time. For example, if you average a certain score on your customer service survey, then you will get a gift card.

Recognition is unexpected reinforcement of results that have already been achieved. An example would be giving an employee a gift card out of the blue to thank them for achieving a high average score on their customer service survey.

Eyes On the Prize

The biggest problem with rewarding employees for good customer service is it takes their attention away from providing outstanding service and re-focuses them on winning the prize.

We’ve probably all seen examples of the behavior changes this can cause:

  • Directly asking customers to provide the top score on a survey
  • Selectively encouraging only highly satisfied customers to complete a survey
  • Submitting phony surveys to bolster scores (yes, this happens)

The Goal is not the Goal

What’s the purpose of conducting a customer service survey?

When employees are rewarded for achieving a certain score they may act as though achieving that score is the ultimate goal. However, most customer service professionals will tell you that the survey is really a tool that can be used for continuous improvement.

Here are a few ways that focusing solely on a survey goal might prevent continuous improvement:

  • Employees may care less about service failures if the average looks good.
  • It lessens the need for analysis to identify customer pain points.
  • Employees may stop trying if they feel there’s nothing left to prove.

Let’s imagine a survey of 100 customers where 90 are satisfied and 10 are unhappy. If my employees are focused on achieving a specific target, they may feel great about a 90% customer satisfaction level. However, they’ll be much more eager to find out how to win over the other 10% if their true focus is continuous improvement.

So, how do I motivate the team?

If you want to learn more about the science behind rewards and employee motivation, check out Daniel Pink’s fascinating book, Drive. Pink's biggest point is that the true motivating factors are purpose, autonomy, and mastery. Let's look at each one in a customer service context:

The very best organizations have a clear and compelling customer service vision that describes the type of service they're hoping to provide. It's amazing what happens when the whole team is unified around a common objective. 

Nobody wants to be micromanaged. Give people the resources, training, and authority to get the job done right and then get out of their way and you'll see people taking responsibility for the results they achieve.

We all want to be good at what we do. Help bring out the best in employees through coaching, training, and continuous feedback and you'll find that people will step up to the challenge of becoming the very best they can be.