Peer to peer reward schemes have received a lot of press over the past few weeks, but what exactly are they, and how could they potentially benefit the culture and productivity of your business? We decided to investigate…
Essentially, peer to peer reward schemes involve businesses providing incentives to their employees to nominate their fellow employees for exceptional work.
The nominations are then reviewed by senior management; on a weekly, monthly or quarterly basis; and winners decided upon based on their nominated achievements against the set behaviours, values and goals encouraged by their wider business.
The benefits of peer to peer reward schemes can be numerous, but it can depend on the culture and values of your individual business.
One of the main benefits to companies is the increase of recognition for those in more traditional ‘back-office’ roles, such as accounting, HR or finance, where performance is often more difficult to quantify compared to those in departments such as sales.
Another benefit enjoyed by many businesses is the ability to shift the burden of workplace recognition away from managers. With many facing ever-increasing workloads, and holding responsibility for many direct reports, it can be difficult to consistently recognise and reward their best performers. Colleagues can also have a more unique insight into the day-to-day challenges that are faced, so, by opening up recognition to all levels, it can make the concept instantly more scalable within your organisation.
Peer to peer reward schemes can also be popular due to their positive effect on employee engagement. It’s a subject that many businesses are keen to actively improve on, and schemes that encourage and promote peer to peer recognition can be incredibly effective at achieving this. This sort of active recognition also encourages a positive culture of recognition, allowing people to constantly appreciate and celebrate their fellow co-workers, helping to create a productive and welcoming place to work.
Most incentives for peer to peer reward schemes require cash incentives, but for this to be widely accepted across your business, management buy-in is required from the start. Employee participation is unlikely to be an issue if your scheme is constructed and promoted properly, but if you do encounter any reluctance, rewarding workers who do make nominations could also be a good option.
Peer to peer reward schemes are normally relative cost-effective to set up and manage – typically around 5% of the total amount budgeted for running such a scheme – you should also ensure that the amount invested is realistic for your business.
With most peer to peer recognition schemes, cash incentives are usually included in one way or another. The most obvious way that businesses allocate this is to allot a certain budget, whether yearly or monthly, to each employee, which they can then use to vote for their peers.
How much you want to spend is entirely individual, but companies that allow voting on a more regular basis, such as monthly, can typically allocate between £5-£10 a month to each employee. Others might allocate £100 a year, which an employee could then split between various different colleagues as they see fit.
The winning employees will then normally receive a predefined percentage of the total ‘value’ of the votes.