When managed effectively, competition can deliver a wealth of benefits. It can provide individuals with the motivation they need to work hard and achieve objectives. It can encourage effective team working as managers seek to harness the different strengths of team members to secure optimum team performance. It can engender greater commitment to quality as people seek to use this as a lever to beat their competitors. Competition can serve as a spark to creativity as individuals seek out all possible avenues to get ahead of the crowd. It can also help managers to identify which individuals thrive under pressure and which are better suited to less stressful roles.
However, there are potential downsides to competition and these need to carefully managed in order to prevent the cons from outweighing the pros.
Employers can often find it difficult to agree on the type of competition they want within their organisation, the targets that they will use and the measurement techniques that they will apply. For example, it is common for businesses to give different sales teams clear revenue targets with the lure of the highest bonuses for the top performers. Whilst this will usually give rise to healthy competitive rivalry, it can also mean that important long-term projects get pushed to one side as the team dedicates all its energy to achieving the short-term revenue target. In business, ‘you get what you measure’ so it is critical that the goals and objectives which are set for teams are in line with wider business requirements.
In very competitive organisations, managers can also find it difficult to get individuals to see the bigger picture and act in the best interests of their organisation as a whole, rather than following the very narrow targets that they have been set as individuals or as a team.
Employers have to be careful not to let competition have a ruinous effect on morale at any level. For example, if individuals in different teams find themselves competing against colleagues for resources, budgets or the time of staff in different departments such as Marketing of Legal, ill-feeling can quickly spread amongst the disaffected parties.
Equally, businesses should introduce clear processes and guidelines that prevent individuals from different teams squabbling over the allocation of sales revenue if parties from different teams have worked together to win a contract. Infighting such as this is always damaging.
Managers must also be alert to the risk of creating a long-hours culture or creating conditions where bullying can be used. For example, when targets are allocated at a team level, it can be very difficult for individuals to be seen as the first to leave the office, despite having have completed their contracted hours, because they fear being told by colleagues that they are not pulling their weight.