Rethinking Rewards & Recognition: It’s Not Just Top-Down

Imagine a workplace where every team member can give kudos/shoutouts, transforming recognition into a shared and energizing experience.

Sounds engaging, right?

This article reimagines employee recognition by shifting from top-down to inclusive peer-to-peer systems of recognition. Highlighting Enron’s failures and successes at Deloitte, Google, JetBlue and Zappos, it shows how empowering all employees to give kudos fosters genuine appreciation and collaboration. This approach boosts motivation, retention and success, ensuring every contribution is valued and celebrated.

Let’s start with a simple question: What comes to mind when you think of employee recognition?

It’s often receiving acknowledgment from higher-ups in the hierarchy for a job well done. And it’s completely okay to think this way because it certainly feels good and valued to receive recognition from those at the top.

But is it only recognition from leaders that matters?

Employees often go above and beyond their defined roles to assist their teammates. Although these small acts of support may not always reach the leadership team, they deserve recognition. This is where peer-to-peer recognition becomes invaluable, ensuring that these contributions are appreciated and celebrated.

Peer-to-Peer recognition is basically employees being recognized by their teammates who truly understand the effort, late-night calls, nervousness, journey and thorough communication that went into completing a project. Doesn’t that sound more powerful?

By putting the power to recognize in everyone’s hands, you can create a sustainable, authentic source of employee recognition.

The Traditional Approach of Recognition

The traditional approach involved employees being recognized for their work quarterly or annually by their managers or leadership. In this model, recognition was solely in the hands of leadership, creating a one-way street where communication flowed only from the top down.

Progressive, growth-oriented organizations quickly recognized the need for a recognition culture where communication flows both ways, not just top-down.

However, many organizations still operate under the misconception that recognition can only flow from the top down, and this misconception needs to be eradicated as soon as possible.

Why is this important? Those at the top often don’t get on the ground to interact with frontline employees and fail to understand the critical importance of gathering their feedback. As a result, frontline employees start feeling left out and unheard, making their retention a significant challenge for the organization.

This HBR article highlights how Deloitte traditionally used an annual performance review system where employees were evaluated and recognized by their managers. This time-consuming approach often overlooked daily contributions, causing a disconnect in recognition. In 2015, Deloitte introduced “Performance Management,” a new system featuring frequent check-ins and real-time feedback from managers and peers. This shift enhanced dynamic recognition, improving employee engagement and morale.

Where did the Traditional Approach of Recognizing Employees go wrong?

  1. Over emphasis on Hierarchy: In the traditional recognition system, only top-down recognitions were made, leading people to overly value the hierarchy.

    Employees lost their ownership, innovation and recognition in the process. This top-bottom approach didn’t resonate with the idea of developing people-centric workplaces, resulting in a complete flop show that failed to capture the overall spectrum of employees’ achievements across the organization.

One real-life example of overemphasis on hierarchy and its consequences is seen in the case of Enron Corporation. Enron, once considered one of America’s most innovative companies, notoriously collapsed in 2001 due to widespread accounting fraud and corporate misconduct.

At Enron, there was a heavy emphasis on top-down recognition and performance evaluation. The company’s performance evaluation system, known as the “Rank and Yank” system, required managers to rank employees on a scale from top performers to underperformers. Those at the bottom were often fired.

This rigid hierarchy fostered a culture of fear and competition rather than collaboration and innovation. Employees were incentivized to prioritize short-term gains and to manipulate financial figures to meet targets, leading to the company’s eventual downfall.

  1. Infrequent Recognitions: Traditional recognition programs had infrequent intervals, such as quarterly, half-yearly, or yearly awards. This system forced employees to wait long periods for their work to be acknowledged and the focus was only on celebrating big achievement and  ignoring a series of small contributions made by the team, leaving them feeling disengaged and ignored.

In a Forbes article, David Burkus highlights how Adobe shifted from annual performance reviews to regular feedback sessions called Check-in. This change addressed infrequent recognition, boosting employee engagement and productivity.

  1. Formal, Bureaucratic Process: Traditional recognition systems were often perceived as very formal and bureaucratic by employees. This perception stemmed from the process of selecting through voting and then rewarding employees. Employees felt that these recognitions were bureaucratic and done merely for checking boxes, lacking genuine celebration of achievements.

A clear example of a bureaucratic recognition system is the Wells Fargo cross-selling scandal. Wells Fargo pushed employees to meet very high sales targets, rewarding them with bonuses. This led to employees creating fake accounts to meet these targets. Over 5,300 employees were fired from 2011 to 2016 because of these practices. The high-pressure environment caused severe stress and anxiety among workers, prioritizing meeting quotas over ethical behavior, which badly hurt the company’s reputation.

What is Peer-to-Peer Recognition?

Peer-to Peer recognition empowers employees to express appreciation for their coworkers, encompassing their peers, managers and direct reports. Peer recognition can be expressed in various ways: 

  • Acknowledging someone in front of the team during a meeting
  • Admiring a peer on the team channel by saying thank you for their help in meeting tight deadlines
  • Using the organization’s internal communication channel to show gratitude and recognize each other. 

The goal is to let employees recognize and celebrate one another, regardless of their place in the hierarchy.

Peer-to-Peer recognition also helps maintain manager motivation. It is often seen that subordinates get recognized, but team leads are rarely publicly acknowledged. Through peer recognition, direct reports can also praise their managers for the skills that helped complete tasks successfully.

One of the best examples of Peer Recognition in action is Google. In fact, its employee recognition program is named ‘Peer Bonus’.

The program allows employees to recognize when their peers go above and beyond with personalized notes and messages on a shared platform. It comes with cash bonuses that depend on the type of contribution. The financial rewards vary, but the system encourages a culture of appreciation within the organization. 

The scheme also applies to open-source projects where contributors receive peer recognition from Google teams that rely on their work.

How Peer-to-Peer Recognition can help drive Success for Organizations?

  1. More Frequent Than Top-Down Recognitions: Peer recognitions are frequent and help build employee engagement. The more often people are recognized, the more connected they feel. Limiting recognition to just leaders and managers means fewer people get feedback. With peer recognition, everyone can give and receive feedback, making it more frequent and instantly rewarding.

This Worvivo article highlights how Airbnb promotes peer recognition through small gestures like handwritten notes and pop-up celebrations. These informal recognitions help create a positive and connected workplace environment, enhancing employee engagement and satisfaction​.

  1. Appreciation from a Deeper Understanding of Work: Peer recognition often comes from colleagues or juniors who are involved in the day-to-day tasks. They understand the effort and details that go into the work. 

    For example, if a colleague appreciates a peer’s well-crafted emails, they know how much work goes into making them effective. This kind of recognition is meaningful because it shows that small efforts are noticed and valued, something leaders might miss.

JetBlue Airlines created a program in which employees could nominate a co-worker for their day-to-day contributions. Any example of extra effort was welcome. 

Once JetBlue selected a winner, the company would then share the news via its internal newsfeed and provide the winning employee with award points they could use toward prizes like dinners and travel benefits.

The program succeeds because it’s organically peer-to-peer. Colleagues do the nomination. Colleagues get the rewards. And colleagues read about what the winner did to earn it, reinforcing the idea that extra work at JetBlue does not go unnoticed — either by management or peers. JetBlue recorded 14% increased engagement as a result of its recognition practices.

  1. Peer Kudos/Shoutouts- Key to Building Employee Retention: Feeling valued at work reduces the desire to leave the company. Peer recognition boosts motivation, encourages ownership of work, and makes receiving feedback more positive. It’s powerful and offers many benefits, like higher retention rates, increased happiness, and better engagement.

Zappos has a peer-to-peer recognition program where employees can give each other $50 for a job well done. This program emphasizes the value of appreciation coming from colleagues who understand the effort behind the tasks, leading to a more engaged and motivated workforce​.

Creating a Culture of Gratitude through Recognition

A simple thank you from a manager or leader can make an employee feel good, but it often feels like ticking a checkbox rather than effective recognition.

To truly foster a culture of recognition, collaboration, gratitude and teamwork, peer-to-peer recognition that flows both ways (top-down and bottom-up) is essential.

Peer-to-Peer recognition is powerful because it comes from a place of genuine gratitude, without any hidden agenda. It’s about acknowledging the help and effort of colleagues, based on mutual respect and equality.

This type of recognition not only builds stronger connections among employees but also encourages a supportive and collaborative work environment where people are motivated to help each other more.


Embracing a multi-dimensional approach to recognition and rewards (R&R) transforms workplace dynamics, enhancing employee engagement from all angles. By incorporating bottom-up, top-down and peer-to-peer recognition, we cultivate an environment where every individual feels valued and empowered. This inclusive culture not only fosters stronger connections and collaboration but also ignites a collective drive towards success. It’s not just about acknowledging achievements; it’s about celebrating the diverse contributions of every team member, fueling motivation and cultivating a sense of belonging that propels the organization forward.

Khyati Ojha

Hi there, Welcome to my corner! I'm a Researcher and People Scientist at Springworks. I've found my calling in uncovering the secrets to workplace happiness. From my earliest days, I've been drawn to the world of HR and People-related topics, eager to shine a light on what makes us truly thrive at work. Through my research and writeups, I aim to sprinkle some extra brightness, joy and purpose into workplaces everywhere.

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