Various studies on the effects of competition show that optimal productivity doesn't require competition. Actually it requires its absence. The ideal amount of competition in your company is none at all.
Any informal competition that may develop should be discouraged. As a manager, it is your task to go out of your way to design cooperative work groups and incentives.
Competition defined means requiring one person or another group to fail in order that another can succeed. It is therefore inherently counterproductive.
The effectiveness of supervisors and subordinates alike goes hand in hand with a cooperative orientation. One reason that cooperation is associated with better performance is that employees enjoy this arrangement more. In one study, people were satisfied with their jobs and inspired to work hard if their supervisors valued cooperation in the workplace. Those who worked in a competitive atmosphere were dissatisfied and in many cases thinking about quitting. One sociologist's research concluded that "social cohesion" means better results. This same research showed that the pressure produced by having to defeat others and risk being defeated can interfere significantly with performance.
To focus on winning, on beating out a colleague is often to divert attention from the work itself. Even the desire to push oneself to succeed can be based on comparing one's performance with some absolute standard or with how one did last year. . It can be inspired by the gratification of working with others. Cooperation can be structured by creating what social scientists call "positive interdependence." Here, members of a group depend on, and are accountable to one another. In practice, that means all group members work for the same goal, use the same resources and receive the same reward. The shared group identity that results is a powerful motivator because one person can succeed only if the others succeed too.
It's good to keep in mind what cooperation doesn't mean. It doesn't mean everyone thinks alike or that no one ever argues. Disagreement produces change and challenges mistaken decisions.
It doesn't mean altruism, a structure in which employees sink or swim together. Each has a built-in incentive to work with the others, not to help them at his or her own expense.
Cooperation doesn't rule out bonuses and incentive plans. In moderation, these can be effective motivators, providing they are never offered as prizes that only one person or group can win.
Any team that reaches a certain goal should be eligible for the bonus.
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