When being recognized makes employees feel less appreciated: Evidence regarding when and why peer-to-peer recognition could backfire

Research links intangible employee outcomes with ultimate firm performance and business press suggests peer recognition systems can positively influence such employee outcomes, including the degree to which employees feel appreciated. We collect survey data at a company both pre and post the rollout of their public peer recognition system. Contrary to company expectations, employees felt less appreciated by their peers after system implementation. We then develop and experimentally test theory to better explain why this decline likely occurred. We find that two features of public peer recognition systems, public feeds and leaderboards, induce different types of social comparisons, and each have incrementally negative effects on the average feelings of appreciation among employees, even though, in isolation, peer recognition positively influences employees’ feelings of appreciation. These results help explain the findings from our field surveys and highlight that firms should carefully consider how the features of their peer recognition systems affect employees, as some features may unintentionally harm employee outcomes.