There is various team collaboration activities defined in scrum rule book. For example, Daily stands up, sprint planning and retrospective are examples of team collaboration. The fact that there is lots of scope for any team to experiments in Scrum. One such experiment is Peer Feedback. Scrum recommends only product feedback during sprint review from all stakeholders, mainly from production owner.
Traditionally feedback is considered as project managers responsibility and its mostly one to many form i.e from manager to employee. In case of scrum, its project manager or sometimes scrum master who observes team members behavior and share feedback. These feedbacks are usually part of performance evaluation and conducted with team at the end of the year.
Some organization follows 360 degree feedback, which is many to many form of feedback and fill peer gap up to some extent. Where exploring 360 degree feedback is not in scope of this article, it is worth to mention that one of the main objectives of 360 degree feedback is individual performance evaluation. It’s normally confidential, based on generic questionnaire and not shared with individuals. It does not focus much on team collaboration.
In other organizations, feedback is normally shared from scrum master or project manager to team members. It’s very rare when peer are encouraged share feedback to the peer.
What is Peer feedback?
Peer feedback, as name suggests, is feedback mechanism where each peer picks up one peer, observe for a given time frame and at end shares feedback to picked up peer.
Wikipedia has very good definition on Peer feedback as well. 
“Peer feedback is a practice in language education where feedback is given by one student to another”.
In terms of scrum, scrum team members including product owner and scrum master can participate in peer feedback. Scrum Team will always have options to include product owner in feedback cycle based on their easiness.
Why Peers feedback is critical in scrum:
Peer Feedback is based on basic ideology that scrum team work closely together on day to day to achieve sprint and release goal. They are the one who closely observe peer behavior and individual contribution on sprint success, thus, they can give the most meaningful feedback and evaluation for continuous improvement. Thus, peer feed results into “Voice of the Team” based on day-to-day facts tends to generate better accuracy.
How to do it
Teams which do not have 360 degree feedback system can follow 4 step processes.
Step 1: Pick up a peer which you want to give feedback
Step 2: Observe his/her behavior for a specified period; say a month for monthly feedback. Duration can be in sync with sprint length.
Step 3: Schedule a feedback session at end of specified period. Block a discussion room in advance for sharing it Face to Face. Distributed team can make use of digital medium.
Step 4: Most important step. Share feedback with peer and record it. Recording is recommended. Recording medium can be a paper or digital. Recording is crucial for future reference. This step should end with agreement from both peers on feedback and improvements suggested. Peer do not get a common agreement, like in any other feedback, it has no meaning.
Below pictures demonstrate two peers feedback cycle in same team. Peer involve in feedback are different in both cycle of feedback
Either of plain vanilla or well formatted online questionnaire feedback formats should be fine. Team can start with open feedback and after 5-6 of feedbacks cycle, team can switch to a well prepared questionnaire. Questionnaire can as used in eBay . Selected feedback format should be okay to team and most importantly should be simple.
Any Feedback technique can be a used. I prefer OSCAR  feedback technique because it is easy and well formatted.
I have observed (O)...particularly in this situation (S)...with the possible consequence (C)...I suggest the following alternative (A)...resulting in (R)."
Adding more fun on it and make it more participative, we used lottery system for picking up a peer. Repeated Peer or self or back and forth Peers was avoided.
To kick off, we scoped in within scrum team first and involved scrum master as well. We decided to give max two actions which one likes and wanted to continue and at max two areas where peer need to improve in coming month.
Benefits from Project Manager/scrum master Point of view:
1. Sooner to achieve and sustain performing stage.
2. Because manager cannot be as close to every team members as their peers, so Understanding voice of crowd helps him knowing each individual of the team.
3. Focusing on improvement actions like trainings etc and many more.
4. Manager needs to give space to team to improve themselves. One powerful tool is peer feedback
5. Its quite fast than traditional way, so ROI is higher.
Benefits from Team member’s point of view
1. Frequent feedback. So lots of time to improve rather than getting feedback at the end of year and have no chance to improve.
2. Normally peers share more meaningful feedback than managers. Peer feedback is more acceptable by Peer (crowed or team) than managers (one or two people’s observation).
3. Improves self managing and self organizing competency in team.
4. Team takes responsibility of continuous improvement in various areas like product quality and stability, customer satisfaction, improving velocity, achieving organization vision and mission etc.
1) Training on feedback technique for every team member is must here. It involves additional cost.
2) During forming and storming stages, Team members might not be ready for adjusting so many feedbacks from peers in place of comfortable one or two end of year feedback.
3) Personal ego for senior team members to receive feedback from junior team members
4) Organization culture may not support peer feedback at large scale.
5) Peer feedback is not taken seriously since feedback is supposed to be a manager’s bread. In reverse, manager’s own observation may have impact of “voice of team”.
6) Anything new is chaotic and team is reluctant to adjust any change.
Peer feedback system is comparatively new concept, thanks to Agile. Many companies e.g ebay are experimenting on it. It needs lots of focused effort and cultural drive. A lot more have been written on Top down or manager to subordinate feedback approach.
One of team member raised a concern on it during sprint retrospective and that’s how my scrum team has decided to go for peer feedback system.
The whole objective was to practice continuous improvement. Retrospective is good way for process and practice improvements, we did not had any system to give and receive peers feedback.
HR/project or organization can publish set of questionnaire to ensure that organization point of view is also covered in peer review.
All Teams needs to practice peer feedback. Eventually it will develop a culture when peer feedback will start playing an important role in continuous improvement. On bigger scale, where an individual performance is measured rating high performer to low performer, peer feedback will play a critical role. Peer Feedback will be given a good weightage among other factors in categorizing. HR will have to play a very crucial role in developing and encouraging peer feedback culture in organization.