TeamofRivals_Body.jpgby Iris Dorbian.


America has always been imbued with the spirit of competition, especially in sports. Whether it’s a swimming race at a national heat or a championship tennis match, the drive to win is a powerful catalyst.


A similar mindset exists in the workplace, where very often employees vie for leads, coveted accounts, or simply power, with the same gusto they might display at an athletic contest. However, if not harnessed properly, competition can lead to a toxic, cutthroat culture resulting in high employee turnover and erosion of morale.


For small businesses with a skeletal workforce, this scenario can have particularly dire consequences to the bottom line. How then can internal competition at your workplace be leveraged positively and in a way that will strengthen your company’s bottom line? Below are a few tips:


Avoid positioning employees against each other

This is a surefire remedy for internal discord and disharmony. If you’re issuing a challenge to staffers, let them know what they will be judged on. Emphasize the effort.


Don Fornes, founder and CEO of Software Advice, an eight-year-old software consulting company based in Austin, Texas, often works with small business clients and agrees. “Don’t make it a zero-sum competition,” he stresses. “Rather make it where theoretically everyone can win.”


For example, Fornes says everyone at his company is eligible for the same rewards. “All employees receive a bonus if they hit their sales or performance goals,” he explains. “We don’t just offer a bonus to the one person who performs the best.”


TeamofRivals_PQ.jpgDon’t overstress the rewards

This takeaway might sound counterintuitive to anyone who has ever entered a contest or race but sometimes, it truly is the spirit of competition that drives and galvanizes people to do their best. Make the challenge light-hearted and fun. Employees shouldn’t feel that they’ve let down the entire organization because they couldn’t keep pace with a goal or win a challenge.


Kristy Sharrow, director of marketing for LevelEleven, a Detroit-based provider of software solutions that caters to small businesses, concurs. “The prize is less important than most people think,” she explains, adding that many of her company’s clients have run successful competitions that offered only “bragging rights” or “inexpensive incentives.”


One client, in particular, Sharrow notes, infused its competitions with playful humor. “They offered incentives like toy chatter teeth or a plaque that said, ‘Chatter It Up.’”


Her own company takes part in similar whimsy. “We run cold-calling competitions daily for a macho man figurine and everyone gets fired up to win it,” she says. “Another client just ran a contest with an incentive of milk and cookies. The employees loved it. Most of the time, it’s the competition itself that motivates employees—not what they’ll win.”


Emphasize improvement

To avoid turning your team of rivals into a team of backstabbing, Machiavellian power players, it’s important to place a premium on improvement rather than winning at all costs. Such a positive reinforcement may result in happier and more confident employees who may be induced to go the extra mile for you when times get tough.


Jim Grew, president of the Grew Company, a consultancy that frequently works with small businesses, subscribes to this best practice. Having mentored many small business leaders, Grew looks especially askance at the negative aspects of internal competition.


“Usually, it’s great at first, but then it erodes into competition for its own sake, with the wrong priorities emphasized,” he says.


Instead, says Grew, small business owners should reward improvement. “This requires carefully defined and specific targets, short timelines [to achieve goals] and encouragement by management,” he explains. “Try with two teams who may or may not compete directly. Ask the leaders what is one thing they could do to ramp up results in an amazing way? Guide them in picking the activity, and ensure that the measure is unambiguous. Tell them it’s a test.”


Grew tried this precise approach with a mid-size manufacturing client. “[We helped them structure] a small monthly bonus for all their employees if all orders were shipped on time with no errors or quality problems,” he says. “Earnings jumped $1 million in a year.”


Don’t make the competition interminable

To foster internal competition that will benefit your bottom line, make sure that the challenge you issue is for a specific length of time. You want to motivate your employees—not make them feel they’re running a marathon. With no end in sight, staffers might give up prematurely out of sheer fatigue, boredom, or frustration.


Sharrow echoes the sentiment. “If a [contest] drags on, it’s difficult to keep employees motivated to compete,” she says. “We suggest competitions run for anywhere between an hour and a few weeks. If it’s around something like a quarterly bonus, competitions can run longer. But that should be the exception.”


Keep employees in the loop

Lastly, to increase and maintain employee engagement, make sure each competition participant knows their individual standings as well as the deadline for the competition. Use in-person meetings, social media platforms, and e-mails to communicate updates. And be sure to stay consistent. If employees become confused about the details of the competition, the entire exercise loses its effectiveness.


Using competitions or challenges to motivate your staffers can be a great way to boost your bottom line while increasing employee engagement. But make sure they’re executed in a manner that encourages effort. Otherwise you may end up paying a costly price when it comes to both company morale and profitability.

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