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How Much Should I Encourage Competition Within My Team?
By Simon Bell, Mindtools Content Writer and Editor
Imagine you lead a team with ambitious goals. Maybe you don’t have to try too hard: perhaps that’s already you. You want to maximize performance, drive motivation, and create an environment where employees strive for excellence. Should you encourage competition among your team members to achieve this? Or would fostering collaboration and shared success yield better long-term results?
Many organizations use competitive strategies to spur productivity. However, while competition can drive individuals to push their limits, it can also breed stress, disengagement and toxic work environments.
So yes, competition is almost always a good thing. But striking the right balance is essential.
The Role of Competition in Organizations
Competition has long been a staple of organizational strategy, particularly in performance-driven functions such as sales, finance and technology. Companies often implement incentives such as:
- Bonuses for top performers
- Gamified productivity metrics
- Sales contests and ranking systems
- Recognition awards (e.g., “Employee of the Month” programs)
These strategies are designed to boost motivation, productivity and innovation. But do they work?
The Benefits of Competition
Research suggests that competition can enhance performance in certain contexts. Research has found that moderate levels of competition can lead to increased effort and productivity, particularly in tasks requiring individual performance. Similarly, other studies have suggested that healthy competition can lead to higher engagement and goal achievement.
When structured properly, competition can:
- Drive motivation. Employees may push themselves harder to outperform peers.
- Encourage innovation. The desire to gain a competitive edge can spur creative problem solving.
- Enhance goal setting. Clear performance metrics can create measurable objectives for employees.
The Downsides of Competition
However, excessive or poorly managed competition can lead to unintended negative consequences. Some studies indicate that high-pressure environments can create stress, undermine teamwork, and even encourage unethical behavior.
Potential drawbacks include:
- Increased stress and anxiety. Employees may feel pressured to perform at unsustainable levels.
- Reduced teamwork. A focus on individual achievement can discourage collaboration.
- Unethical behavior. Employees might cut corners or withhold information to stay ahead.
- Lower morale. Those who consistently lose in competitive settings may feel disengaged.
Should We Encourage Competition at All?
While competition has its advantages, many organizations have shifted toward prioritizing collaboration instead. Some research shows that companies emphasizing collaboration tend to have higher levels of employee satisfaction and retention. Alternative approaches include:
- Encouraging collaboration. A collaborative work culture fosters knowledge sharing, teamwork and problem solving. Studies show that employees in collaborative environments are 50 percent more effective at completing tasks than those in competitive settings. Instead of rewarding individual achievements, some companies now celebrate team successes and shared learning.
- Promoting psychological safety. Employees perform better when they feel safe to take risks, share ideas, and make mistakes without fear of failure. Google’s Project Aristotle found that psychological safety was the number one factor in high-performing teams. Creating an environment where employees support one another can enhance innovation and long-term success.
- Focusing on intrinsic motivation. Rather than relying on external rewards, organizations can foster intrinsic motivation by helping employees to find purpose in their work. Daniel Pink’s book “Drive” highlights how autonomy, mastery and purpose are stronger motivators than competition-based incentives.
How Much Competition Is Healthy?
Since competition can be both beneficial and detrimental, the key is balance. Managers should assess their team dynamics and consider whether competitive elements will enhance or hinder overall performance. Here are some guidelines for maintaining a healthy competitive environment:
- Align competition with organizational culture and values. If collaboration is a core value, introducing aggressive competition may backfire. Instead, focus on competitions that encourage team-based achievements rather than individual rivalries.
- Structure competition to foster growth. Ensure that competitive challenges encourage learning and improvement. For example, rather than ranking employees strictly on output, measure success based on skill development and knowledge sharing.
- Use transparent and fair reward systems. Employees should feel that competitions are fair and merit based. Avoid favoritism or ambiguous criteria, which can lead to resentment.
- Encourage friendly rivalry, not cutthroat behavior. Make competition enjoyable rather than stressful. Some companies use gamification techniques – such as team challenges or points-based systems – to promote engagement without creating hostility.
- Balance competition with collaboration. Rather than framing success as a zero-sum game, consider hybrid models that incorporate both competition and teamwork. For instance, setting team-based performance goals can drive results while preserving a supportive culture.
As an example of changing attitudes towards competition and collaboration, take a look at Microsoft. The software titan historically used a “stack ranking” system, where employees were ranked against each other, leading to intense internal competition. However, after recognizing its detrimental impact on morale and innovation, the company shifted to a more collaborative performance review system in 2013. This change led to increased engagement and improved overall company culture.
The Pros and Cons
Competition can be a powerful motivator, but it must be managed carefully. While it can drive performance and innovation in the right settings, excessive or poorly designed competition can damage morale, hinder collaboration, and create a toxic workplace culture.
Managers should consider their team’s unique dynamics before introducing competitive elements. When done right – through friendly rivalry, fair incentives, and a balance of collaboration – competition can be a useful tool for driving excellence without sacrificing team cohesion.
Ultimately, the best approach is one that aligns with the organization’s values, encourages personal and professional growth, and creates an environment where employees thrive. Before implementing competition, ask yourself: will this drive engagement and motivation, or will it divide and discourage my team? The answer will shape your strategy for fostering a high-performing and cohesive workplace.
What’s Next?
If you’re managing a team, you likely need to know about how to motivate them, reward them, and get them to collaborate. And introducing an element of friendly competition can help. Check out our What Is Motivation? Infographic for a start. Then, you can develop your own skills in key areas with our Skill Bites on Recognition and Collaboration.
Tip of the Week
Recognizing Your Impostor Syndrome Archetype
By Kevin Dunne, Mindtools Content Writer and Editor
Impostor syndrome – feeling like a fraud despite evidence of success – affects even the most accomplished leaders. Dr Valerie Young’s research identifies five archetypes of impostor syndrome, each with distinct self-doubt patterns:
- Perfectionists strive for flawlessness, fearing that any mistake reveals incompetence
- Superwomen/Supermen measure their worth by how much they can handle alone
- Natural Geniuses believe success should come effortlessly, and struggle with challenges
- Soloists avoid seeking help, equating self-reliance with capability
- Experts never feel knowledgeable enough, delaying opportunities.
Recognizing your archetype is the first step toward overcoming impostor syndrome. Challenge self-critical thoughts, seek mentorship and take small, confident actions. Leadership isn’t about knowing everything – it’s about growth, collaboration and resilience.
Which archetype do you identify with most? Understanding this can help you build authentic confidence and lead with clarity. Try our quiz, What's Your Impostor Syndrome Archetype?
Pain Points Podcast
If you experience anxiety, are you cut out for leadership? Morra Aarons-Mele thinks so. In fact, this writer, keynote speaker and podcast host has managed her own anxiety throughout her career. And from the many high-ranking people she’s worked with, she has evidence that anxiety – handled well – can be contained, controlled, and even used as the catalyst for leadership superpowers!
On this week’s podcast, Morra talks to Matthew Hughes about the difference between anxiety and stress; the dangers of “thought traps”; and the down-to-earth advice revealed in her influential book “The Anxious Achiever.”
Subscribe Today
Video of the Week
Phil Willcox, Building Psychological Safety With Your Team
Psychological safety is a common goal for managers. But how do you know whether you're achieving it? And what makes or breaks it in a team?
Find out in this video from emotional intelligence specialist Phil Willcox.
Watch Now
News Roundup
This Week's Global Workplace Insights
The Last Place You Look
Still looking for that new job you promised yourself this year? You’re not alone.
Against the backdrop of a U.S. hiring slowdown, management consultants Korn Ferry reckon people are looking in the wrong place: they’re ignoring where they already work.
So Korn Ferry came up with five tips to help:
1: Think about it from the company’s point of view
Some companies encourage internal opportunities, others aren’t so keen. Find out which yours is.
2: Don’t bomb the internal job board
Be selective. Identify something else the company does that aligns with your passions and interests, then network with people in that area.
3: Understand the company’s needs
If you want to get into marketing but the current staff are being replaced by AI, it won’t happen. So base your search on what the company does need.
4: Be a star in your current role
Taking on more responsibility and exceeding performance goals will showcase what you can bring to a new role.
5: Network, volunteer, upskill
Talk to managers about how to reach your goals, volunteer for cross-functional projects and develop new skills related to the area you want to get into.
Hands Up Who’s Playing the Blame Game?
Trust, we’ve long been told, is the cornerstone of a happy, productive organization.
What you probably didn’t realize is that you can trust your colleagues, and even managers, to sacrifice you to save their own professional skins.
Online news portal Worklife just reported on a study entitled, “Dirty Moves in the Workplace” – which revealed that some two-thirds of employees say they have been “thrown under the bus” by the people they work with.
Strangely, though, say Worklife, “most people deny ever engaging in such behavior themselves.”
The survey found high incidences of workplace sabotage like “blaming others for one’s mistakes (26 percent), sharing negative information about colleagues with company leadership (21 percent), and withholding critical information that could help a colleague succeed (10 percent).”
Executive coach Keith Ferrazzi told Worklife it’s down to leadership to call time on the “blame game.”
He said, “Until organizations create environments where accountability is celebrated rather than avoided, this toxic cycle will continue to erode the foundation of trust that every successful workplace depends on.”
For more guidance on surviving life at work, see our article Top Tips for Handling Office Politics.
See you next week for more member-exclusive content and insight from the Mindtools team!
