Peer-to-Peer Recognition and It’s Effect on Employee Motivation

Employee motivation is hard to quantify, but our company never shies away from a challenge. As a global business network dedicated to happiness at work, Happy Melly is backed by an 11-person team focused on helping people increase job satisfaction. We live and breathe experimentation, so we take ideas and test drive them on each other. And so in the spirit of our culture of adventure and analysis, a few months ago our founder Jurgen Appelo suggested we see if we could draw any tangible data from our peer-to-peer recognition program, one of our ongoing experiments.

Our Peer-to-Peer Recognition Program

For about two years now our team has used a non-conventional bonus system to recognize and reward each other called Merit Money. This is a peer-to-peer bonus system based on recognition by fellow colleagues. Instead of bonuses dependent on a manager’s assessment or individual measurable goals, employees are rewarded by fellow teammates. This recognition can come in the form of money, points, hugs, candies, gift cards or anything the company chooses.

We chose to use the Bonusly tool where points transform into money. Every month each of us gets 100 points to distribute to our teammates in any quantity that we like. Bonusly connects all recognition with different hash-tagged values, which each company chooses. For example our values are:

  • Boldness
  • Creativity
  • Risk
  • Fairness
  • Spontaneity
  • Honesty
  • Trust
  • Patience
  • Kindness
  • Flexibility

Every time we give points to someone, the idea is to connect it to one of the values.

Re-Inventing Bonuses

Since bonuses aren’t bonuses if they are expected, our bonuses are random and unplanned. At the start of each month we roll a die and, if it lands on a six, we’re able to trade in our points for a proportional piece of our collective cash pot. If a six isn’t rolled, we continue to accumulate points until someone manages to roll the lucky number.

The recognition is ongoing and context-specific offering us continued, smaller motivation. The bonus payout is unexpected and is a nice chunk of extra change when it comes. Also, our monthly rolls are a fun — and dramatic — excuse for our remote team to get together and share an experience.

Bonuses aren’t bonuses if they are expected.

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We use Bonusly to transparently track the Merit Money giving, but there are plenty of others available, including:

  • Kudos
  • Terryberry
  • Tinypulse
  • Propsboard
  • Officevibe
  • YouEarnedIt
  • Perkbox
  • TapMyBack

Often these programs have essentially replaced the traditional bonus system because, as Jurgen explains in his book Managing for Happiness and as research confirms, traditional top-down employee recognition systems just don’t work.

So, What Did We Discover?

We wanted to understand not only if Merit Money has an effect on our team, but exactly how — specifically how it affects our motivation.

After extensive data gathering and number crunching, it became clear that the numbers don’t tell a story — at least not an interesting one. There were some correlations between people who had higher monthly commitment levels (we each choose how much we work each month) receiving more points. However on the whole it didn’t give us what we were looking for.

So we changed course and analyzed the qualitative over the quantitative. Over the next several weeks I had conversations with my colleagues and authorities in the Merit Money sphere and spoke to companies who used it, in order to determine the effects of peer-to-peer recognition in a professional setting.

An employee at Typeform said using a peer-to-peer recognition system, “affected my job satisfaction as I think about gratitude on a daily basis. Remembering the nice things people have done to help me and sitting down to type out a bonus are a good meditation on the little kindnesses in life.”

The Effect of Peer-to-Peer Recognition

Bonusly conducted a random survey of hundreds of active users asking how their feelings had changed since adopting the system. The results:

  • 32 percent of users said they were more satisfied with their job
  • 45 percent were more likely to keep working with their company
  • 78 percent were more likely to praise their colleagues

“Companies who came to us with low motivation scores and wanted to improve saw an improvement with regards to motivation and satisfaction,” said Bonusly Cofounder and CEO Raphael Crawford-Marks.

But what about our own team? It wasn’t the easiest beast to tackle, as qualitative data is harder to measure, but through interviews and discussions, we took a hard look into what increased praise and recognition has actually done for our team motivation and morale.



Happy Melly Team

Happy Melly Team

Happy Melly is a global company dedicated to supporting people to be happy at work.

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