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When Workplace Competition Causes Negative Results

A study conducted by Iwan Barankay of Wharton School of Business undermined the commonly held belief that workplace competition drives results. His research found that letting sales team members know how they ranked in relation to their team decreased performance across the board. These numbers were not made public — each individual only knew their own ranking. Nevertheless, Barankay says, “You actually sell significantly more when you don’t show the rankings, and by significant, it was quite an improvement in their sales.” Revealing rank had the biggest impact on low-performing team members: “If I tell you, ‘Good job. You are just in the top 50% of the distribution, and you’re not in the top 10% as you thought you were,’ this is disappointing news.” It tapers optimism and inhibits motivation. Rankings also encouraged a sense of complacency among top sales people. Even employees who believed that they did better when they had access to their ranking made more sales without knowledge of their standing. “So their personal recollection of whether they did well or not did not actually square up with the data.”

The conclusions of Barankay’s study are made more complex by a paper on the same topic cited by the Wall Street Journal. Researchers at Columbia University and New York University studied truck driver performance under two different management styles — they found that “employees working under top-down management improved performance when their results were made public.” But when researchers made results public in a collaborative work environment, performance decreased significantly. Claudine Gartenberg, one of the authors, explains why: “On the one hand, management was structuring work so that employees were ‘all in this together,’ while on the other hand ‘you’re naming and shaming people.’” When employees could privately view their own standings, without any public awareness, there was no decrease in performance.

Although these studies reveal different results, they both call into question a one-size-fits-all gamification strategy. Barankay suggests that instead of widely implementing competition-based motivation techniques, executives test them in small doses. He says, “This is why in my research, I always use ways to pilot or experiment, meaning you take either the whole company or a part of it and then randomly change something so you can understand whether this innovation is helpful or not before you roll it out to the whole company.”