Is Competition Really Healthy in the Workplace?
By Stephanie Monge-Sherman
In more recent years, companies have been starting to realize just how important workplace culture is, and how fundamentally it is tied to the success of the business. Where companies were previously attracting top talent on salary and benefits alone, it now takes more than that and something exponentially harder to offer: potential employees want to know that they’ll be happy in the workplace and experience job satisfaction in their role—no easy feat.
Workplace competition is a big part of the company culture, and it’s been the subject of debate for many industry experts as of late. For the first time, whether or not competition in the workplace is healthy is starting to matter, to both employees and company leaders; But the answer to the competition question isn’t a simple yes or no, and it can depend on many factors. For companies looking to make a positive culture change while still pushing for both success and employee satisfaction, the answer to this fundamental question could mean all the difference. Keep reading to find out how to strike this delicate balance and pitfalls to avoid.
1. Competition Can Create Happier Employees
Research has shown that happy employees are more productive in the workplace, which in turn leads to company success. In fact, happier employees can be up to 20% more productive (Sgroi, 2015), so it makes good business sense to keep your employees feeling content, motivated, and rewarded. Friendly competition with a prize can be an integral part of that, and one of the ways to foster healthy competition is through games because even the least competitive employee will get something out of it and feel incentivized.
Games help flip the focus from beating each other to the end goal. The key is to find a fun and desirable prize outside of the normal salary, commission, and benefit rewards, but it doesn’t need to blow the budget or take a ton of planning. It could be something simple like a fancy dinner voucher or an extra lieu day; something that employees would want, but can’t or wouldn’t get for themselves. Sometimes a small gesture is all it takes to motivate employees and foster culture change.
On the other hand, it’s important to remember that too much competition can create a negative culture change and promote a toxic work environment. Toxic competitive environments have been known to destroy morale, promote backstabbing, cause stress, and lead to high turnover. After all, most people don’t knowingly look for a job where they need to compete day in and day out, because it’s incredibly taxing. It’s crucial to learn to strike the right balance between competition that creates results but that doesn’t undermine the culture you’ve fought so hard to build (because it can be so easy to crumble).
2. Teamwork is Key
One of the keys to creating a culture change of healthy competition is to design team competitions so that employees are working towards a shared goal. This tact helps alleviate some of the negative pressure that come from competition, while also fostering teamwork and a stronger drive, versus working alone. This also helps encourage safer, more positive methods to achieve goals: employees are less likely to use underhanded or deceitful tactics to get what they need when they’re not in a dog-eat-dog mentality. In fact, studies show that the tighter the race is, the meaner the contestants get (Ansolabehere & Iyengar, 1995).
If your company is set up so that employees have individual goals, you want to make sure these goals don’t undermine other employees (for example, only being able to achieve your goal at the expense of someone else not achieving theirs). This is a sure-fire way to create resentment and negativity, so it’s more strategic to design goals that in theory everyone could achieve if they work hard enough, without causing others to lose.
3. Strike a Healthy Balance
Employees want praise and recognition for their efforts, so it’s risky to only focus on star and high-performing employees. Even though the top performers might be doing the lion's share of the work or bringing in the most significant profits, constantly highlighting their achievements and work can create a negative backlash among your other employees. It can lead to a culture of resentment and loss of motivation, which can negatively affect the company’s overall performance (because the star performers usually don’t make up the majority). When these other employees aren’t feeling recognized, they may not cooperate with others or strive for the company’s best interests (Campbell, Liao, Chang, Zhou & Dong, 2017).
On the other hand, nothing demotivates star performers more than seeing mediocrity praised. When companies reward all employees equally, there’s no motivation to work harder or shine and company performance will reflect that. This is why the right type of competition and reward system is important in order to strike a balance between resentment and motivation to create the results you’re looking for.
4. Can Create a Culture of Fear
One of the biggest risks with a competitive workplace environment is that you’ll create a culture of fear. When your KPI’s and numbers are your only value to a company, work can become an intimidating, threatening place; you can’t have bad days or lose momentum or else you risk becoming an under-performer and losing your value to the company.
A culture of fear also affects collaboration. Employees are often less likely to work together and trust each other when they’re in direct competition, and this can negatively affect the company’s performance: a 2017 study showed that companies that promoted collaboration were 5.5 times more likely to be high performers (Samdahl, 2017).
As a manager (and an employee) looking to drive a culture change, it helps to avoid creating unnecessary competition. Try not to stir up needless conflict between coworkers by making everything a contest; it shouldn’t be a race to see who can get to work earliest or stay the latest, who can go the longest without a break, who asks the most questions in a staff meeting, etc. These mini-competitions don’t drive the business, they can impact safety and simply make employees unhappy, mistrustful, and keep them on edge.
It can help to set stretch goals (help with big picture) based on team performance, so that employees know that when one thrives, they all benefit. This will drive teamwork, incentivize openness and sharing of success tactics, and create a subtle but effective positive culture change.
5. Self-Competition is Healthiest
The right kind of workplace competition can motivate employees, but the absolute healthiest type of competition is when it’s against yourself. Incentivizing employees with stretch goals to beat their previous goals and results is the ultimate way to keep employees driven, happy, and passionate. Plus, it helps them grow as an individual better than competing against others does; they can never stall or get bored when they’re always trying to better themselves and meet continually raised bars and goals that they themselves have set.
A good manager will get to know their employees and learn what gets them fired up, so that they can tailor a success plan around that. Some people thrive in high-stress and high-stakes environments, while others need support and a targeted plan of action to achieve results. Almost all companies need a blend of these types of employees in order for collaboration, trust, and growth to work, but each person can react in vastly different ways to competition.
In fact, research shows that competition only benefits certain people: 25% of people are unaffected by competition, while 25% actually fall apart because of competition. Only 50% actually benefit from competition, and gender also plays a surprisingly prominent role (Bronson & Merryman, 2013). Successful leaders match the competitive environment to their workers’ individual styles, and this is when workplace competition is truly healthy.
Companies are realizing it’s not enough to offer extrinsic rewards (such as free snacks or a gym in the workplace): true culture change happens when companies take a hard look at what drives employees and what makes them start refreshing job searches. The competitive environment in your workplace could be a deciding factor between motivating employees and pushing them out. While every company is structured differently and a one-size-fits-all approach isn’t feasible, the above five ways to create healthy competition and initiate a positive culture change help companies boost their performance, retain top talent, and set a stable foundation on which to grow for years.
Sgroi, D. (2015). Happiness and productivity: Understanding the happy-productive worker. Retrieved from: http://www.smf.co.uk/wp-content/uploads/2015/10/Social-Market-Foundation-Publication-Briefing-CAGE-4-Are-happy-workers-more-productive-281015.pdf#page=9
Ansolabehere, S. & Iyengar, S. (1995). Going Negative: How Political Advertisements Shrink and Polarize the Electorate. New York, NY: Simon & Schuster.
Campbell, E. M., Liao, H., Chuang, A., Zhou, J., & Dong, Y. (2017). Hot shots and cool reception? An expanded view of social consequences for high performers. Journal of Applied Psychology, 102(5), 845–866.
Samdahl, E. (2017). Top Employers are 5.5x More Likely to Reward Collaboration. Retrieved from:https://www.i4cp.com/productivity-blog/top-employers-are-5-5x-more-likely-to-reward-collaboration
Bronson, P., & Merryman, A. (2013). Top dog: the science of winning and losing. New York: Twelve.