Does Competition Really Motivate Employees?

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Using competition in the workplace to motivate employees is more complicated than just setting a goal, slapping up a whiteboard with gauges … and watching progress.

Years ago, I interviewed a coworker for a company newsletter. The employee worked in inside sales. When I asked the standard “what do you like most about working for our company” question, her list included all the usuals: her boss, the people, the flexibility, etc. Then she admitted that she really loved the occasional one-day quick competitions her manager set up … loved pushing to win those. She quickly added that she didn’t want me to put that in my article, because she didn’t want her coworkers to think she was too competitive. (Of course, I didn’t put it in her profile. But I did keep thinking about her request ….)

In general, being competitive in the workplace isn’t seen as a positive quality by someone’s coworkers. A Psychology Today article notes that it has become “synonymous with greed, envy and narcissism.” But that same article notes that “competitive feelings are completely natural … and unavoidable.”

That said, knowing how competition affects all employees (and their relationships with each other) is the key to making competition work as a motivator.

And motivating employees is top on most managers’ minds. We want enthusiasm. We want effort. We want ownership. We want to achieve!

But how much competition is motivating?

Is it motivating to everyone equally?

How can we create competition that works?

We all know the intended pros of competition — but what about the cons? It can create stress. It can create hard feelings if an employee doesn’t think the playing field is level. It can diminish trust between workers. It can keep employees from encouraging and helping each other — effectively killing team spirit. Constantly being compared to others can make employees unhappy. Further, research from the Washington University’s Olin Business School indicates that adding the element of competition can actually dampen creativity in women working on teams.

According to, there are two types of competition: Direct and Cooperative.

Direct competition is an extrinsic motivator. It pits individuals against each other, with only one winner.

  • Use it to create fun challenges and competitions to achieve quick goals. In small doses, it can prevent stagnation. But it has little, if any, effect on long-term behavior.
  • Fewer competitors can encourage employees to try harder. This phenomenon, known as the N-effect, was identified by 2009 research by Stephen Garcia and Avishalom Tor. Their work reported decreasing SAT scores as the number of test-takers increased. For a manager this might mean segmenting a big group — possibly pulling out newer employees for their own competition, or finding another way to keep groups small and individuals relatively equal.
  • Creating a second and third prize can also help keep individuals motivated. If one employee pulls into the lead early in a competition, these additional opportunities can help keep the rest of the group motivated to continue.
  • Consider tying the individual efforts to the team: Maybe the entire team gets the reward if the group hits the combined goal, and individual winners receive extra prizes.

Cooperative competition involves a team working together to achieve goals. In most cases, whenever teamwork and collaboration are part of the competition, results can be strong and lasting, because they are intrinsic.

  • Consider who’s competing against whom. The competition can obviously be between various work teams. But certain situations might make it possible to compete against a competitor or deadline instead.
  • As mentioned above, research from the Olin Business School indicates “that men benefit creatively from going head-to-head with other groups, while groups of women operate better in less competitive situations. As intergroup competition heats up, men become more creative and women less so,” report


Competition at work can motivate people. Team competition can bring employees together to hit the mark. A sprinkling of fun individual competitions can keep things fresh. Strive for balance, fairness and well-defined programs.

Agree? Disagree? Add your insightful comments here.