Is Competition a Good Way to Motivate Business Teams?

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, web-site hits, or other measurements — make sure you compare the work of the teams, not external factors that team members have little control over.

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 web 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.

In the case of the web 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.

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