The Pros and Cons of Employee Competition

Humans are naturally competitive. If you look around society, you’ll see the echoes of competitive behavior everywhere. But it’s not always a productive use of our energy. Competition is one of those things that can bring out the best in us and the worst in us, depending on the context and what it’s trying to achieve.

In a work setting, this is also the case. Most organizations look to use competition between employees to encourage more productivity and higher quality work. Sales teams might use a leaderboard to track conversion statistics, team leaders might nominate an ‘employee of the month’ to recognize someone who has overperformed, or a company might offer innovation incentives for people executing on new ideas. 

When done well, these competitions can be significant motivators that push your company to new heights that even your employees didn’t realize were possible. In this article, we’ll explore some of the key pros and cons of employee competitions and how you can leverage them to your advantage.

The Pros of Employee Competitions

Here are some of the key benefits of competition between employees: 

• Incentivizes better performance. We are social creatures and we naturally have a competitive streak that kicks in when we compare ourselves to others. Employee competitions are a great way to harness that power to motivate your staff to improve themselves and the work that they produce. Often, it’s only through competition that employees realize just what they can accomplish if they focus their efforts. 

• Recognizes and appreciates work performance. Work can be demoralizing if you aren’t getting the validation and appreciation that you deserve for your hard work. Competitions create opportunities for your company to recognize and appreciate your high-performing employees – which helps with morale and loyalty. 

• Creates role models. Competitions provide opportunities for employees to identify those people who are shooting the lights out so that they can emulate their success. These role models act as north stars that pull everyone else to improve their work performance. 

• Retains high performers. We know that high performers are worth their weight in gold, but because of their track record – they often have a range of other work opportunities at their fingertips. Competition rewards are a great way to retain these people and keep them at your organization. This has never been more important as we wade through ‘The Great Resignation’, a macro response to how the pandemic has changed our view on work. 

All of these benefits are valuable in creating the sort of work culture that is continuously improving. There are compounding effects here that can transform your organization for the better. 

Now, let’s look at some of the potential downsides of these competitions.

The Cons of Employee Competitions

As with all things, there are certain drawbacks that you should be aware of if you’re looking to create competitions in your organization: 

• Damages the morale of some underperforming employees. Those people who are not doing well in the competitions, are at risk of becoming unhappy and resentful. While some will take up the challenge, others might get defensive and shut down entirely. 

• Tall poppy syndrome. When competitions go too far, you might find that your employees root for each other to fail – in their own self-interest. If this tendency isn’t checked at the door, your company can fall victim to tall poppy syndrome where high performers are cut down at their knees – invalidating the overall impact of the competition for the company. 

• May create classes within the organization. There is a risk that competitions create classes of employees within your company that doesn’t lend itself to efficient collaboration. Your competitions should never come at the expense of group cohesion and camaraderie. 

• Can create an unhealthy work culture. If competition becomes the number one value in your organization, it can become toxic because the only goal is to win. There needs to be balance coming from other values and ideals to keep things healthy and vibrant for everyone. 

These downsides are manageable if you’re aware of them and take steps to mitigate their impact. But this requires intentional action and conversation with your employees to manage expectations and set the right tone throughout any competition that you run. 

Making the Most of Employee Competitions

Now that we’ve highlighted the potential pros and cons, here are our recommendations for how to leverage competitions and get the most out of them: 

• Provide support for employees who are underperforming. It’s crucial that you work with those lower-ranking employees to help them identify where they can improve and help them get to the next level. This gives them a better chance to compete and shows that you are investing in everyone. 

• Have varied competitions that reward different things. You want to ensure that everyone has a chance to win something after a while and the way you can do this is by having different types of competitions that have different success criteria. This also keeps things fresh and dynamic which is important to maintain buy-in. 

• Include a ‘most improved’ award. You also want to recognize people who have made large improvements, and not just those who are at the very top. This encourages everyone to focus on continuous improvement which is a valuable mantra for your company to have. 

• Ensure that the competition is fair. This should go without saying but many companies still get this wrong because they have certain blind spots. Take your time to work through each aspect of the competition and be sure to consult with the stakeholders to make sure that everything is fair and above board. 

• Stop if it’s doing more harm than good. Assess how your competition is impacting your organization and don’t keep doing it if it’s having harmful effects. Rather pause the competitions and re-imagine how they could be improved, so as not to damage morale further. 

If you can take these principles into account, you should be able to use competitions productively to transform how your organization and its people perform. They are immensely powerful when done well and while that takes some thoughtful execution, it’s well worth the investment of time and money.

Here at NICE, we can help you create healthy competitions and games to improve employee performance and engagement. If that would be useful for you, be sure to get in touch today, and let’s see how we can apply it to your unique situation!