According to the recent research on employee recognition the recognition from leaders has less impact than we may think. Employees feel much better when they are recognized by their peers. (http://www.forbes.com/sites/joshbersin/2012/06/13/new-research-unlocks-the-secret-of-employee-recognition/2/)

Co-workers are close to each other as well as to the events and actions they have to assess. Daily interaction and communication provide them with the comprehensive information about how well their colleague works. Thus, peers can provide more detailed, effective feedback than managers as they have more opportunities to observe co-worker performance. Therefore, when they “thank” their colleague for the efforts he/she applies at the workplace, the impact is much more strong.

Moreover, colleagues can give several assessments, while the immediate superior - just one, and several independent assessments are almost always more objective than one.

At AT&T Universal Card Services in Jacksonville, Florida, anyone in the company can write a message of thanks to someone else and send it. To make it official, employees use a sheet from a globe-shaped pad of colored paper. In four years, employees at AT&T have written more than 130,000 thank you notes. (Secrets of Successful Employee Recognition by Bob Nelson)

Peer-to-peer recognition has a powerful motivating result and increases productivity at the workplace. The recognition of a colleague's success creates a favorable working atmosphere in a company and develops the culture of mutual recognition within a company.

According to America's foremost business philosopher Jim Rohn, who developed business strategies for such companies as Coca-Cola, IBM, Xerox, General Motors, etc. one of the most important factors of motivation is recognition among peers.

"When soldiers in wartime give up their lives during combat, why do they do it? Is it because of patriotism, a belief in the cause they are fighting for, or a fear of court martial if they do otherwise? Perhaps all these things play a part, but extensive research has shown that what really motivates a soldier to fight well in combat is the desire for the respect of the person who is fighting right beside him. This is much more important than medals or other forms of public recognition. This is similar to what motivates salesmen on the floor of a car dealership, students in a classroom or a team of lawyers trying to win a case".

The most enjoyable part of the peer-to-peer award is the notification of all employees about their colleagues' achievements. Different companies do it in their own way, for example during meetings, by e-mail, at the company's website, on the wall newspaper, etc.
Using this method of recognition and award of co-workers, employees feel closeness to a company where they work. Positive communication between peers contributes to creating more friendly atmosphere in a workplace and increases the job satisfaction among employees that, in its turn, bring benefits to the company in term of employees' loyalty and retention.