Is Competition a Good Way to Motivate Business Teams? - dummies

Is Competition a Good Way to Motivate Business Teams?

By Steven D. Peterson, Peter E. Jaret, Barbara Findlay Schenck

Have you ever considered competition as part of your business plan? People who own businesses usually work long hours, put up with tons of stress, and love every minute of it. They love it because they’ve built something of their own — a company that reflects their talents and inspirations — and they’re motivated by a strong pride of ownership.

Good leaders find ways to motivate employees so that they feel the same way, even when they’re part of a sprawling multinational firm. Here are some ways that you can inspire your employees and give them pride of ownership:

  • Give them a piece of the company, using stock-purchase plans that you tie to individual or team performance.

  • Pay out year-end bonuses tied to company profitability.

  • Give employees full control and responsibility for particular programs, including the freedom to make key decisions.

  • Reinforce the sense that they own the successes of the projects by rewarding them for jobs well done.

Although a performance bonus is always nice, you should recognize contributions in other ways as well. Consider an employee of the month award, write-ups in the company newsletter, a round of applause at the next company-wide meeting, or a heartfelt gesture of thanks. When motivating employees, simple morale boosters can be more effective than money.

A major health-related website reorganized its writers and editors to create small editorial teams, each in charge of a specific content area or channel — men’s health, diet and nutrition, children’s health, fitness, and so on. The head honchos gave each team creative freedom to shape the channel and develop new features. The company then set up monthly meetings to review channel performance and recognize important achievements, such as award-winning stories.

By virtually every measure, the quality of the website improved dramatically over the next six months.

The company then tried to go one step further. To create competition among the channels, managers started tracking the number of hits (people logging on to the website) each channel received each month. That sounded like a good idea on paper. In reality, it spelled trouble.

Although competition among teams can be a potent motivator, the approach can also backfire, creating resentment and hard feelings. When using team competitions as a motivating tool, make sure that everyone plays on a level field. As you establish how you’ll judge performance — profits, unit sales, website hits, or other measurements — make sure you compare the work of the teams, not external factors that team members have little control over.

In the case of the company, the number of hits had little to do with the quality of a particular channel and much to do with the interests of the website’s visitors, who tended to be women in their 30s and 40s. As a result, the men’s health channel was always less popular than the women’s health channel, regardless of the quality of stories or its special features.

The result: Instead of motivating employees, the use of hits as a measure created a sense of frustration and unfairness among the teams. Fortunately, the company quickly abandoned the competition in favor of data reflecting the popularity of the entire website.