Is internal competition killing your organisation’s effectiveness?


Most organisations have evaluation systems that measure employees against their goals and how they performed vs their peers. The obvious intent of the performance measurement system is to have a tracking mechanism to know how each of the employees’ is contributing, towards the organisations growth. This gives a comparative measure to reward good performance. This method stems from the grading systems in schools and colleges, that measure a student’s comparative performance, on various subjects. Parents have used this approach for years with children, to push them to perform better, by comparing them with siblings and peers. However, based on research, educators and child experts say, that, comparing a child constantly is not only bad for his/her self esteem but also leads to longterm performance and psychological issues. So if this system does not work for kids can the impact on adults be really that different? While the intent is to drive performance using competition among employees, the unfortunate truth is that, it is detrimental to the overall performance of the organisation.
 To understand how this happens, let us start by understanding the meaning of competition

Competition, is a contest between organisms, animals, individuals, groups, etc., for territory, a niche, or a location of resources, for resources and goods, mates, for prestige, recognition, awards, or group or social status, for leadership.

When you read the definition of competition it immediately makes you think of Darwin’s Survival of the Fittest Theory. The image that comes to my mind, is of people pushing and shoving each other to get to the front. A lot of you who work in corporates, will infact be able to relate to this analogy, where often the competition between teams, team members, business groups and even leaders is fierce and unpleasant.


What is intended to be “healthy competition “ often ends up in ego wars and petty politics.

The Repercussions:

The impact of internal competition is however not just about a few people having personal battles. The business repercussion is far more severe.
  1. Shift of focus : When an employee starts seeing fellow workers as competition, he/she loses focus on what is important. Often, this means moving away from customer needs, organisational needs and business outcomes. The reward at the end of internal competition is in the form of a promotion, salary hike, appraisal rating, organisational status and recognition. And this is where we get it wrong, because now the indivudal starts working for the reward rather than what he /she was hired for i.e. manage customer experience, increase organisatons profitability, etc. When things go wrong this results in people trying to blame other individuals, teams or departments rather than fixing what is broken.
  2. Missing the actual competition: While focusing on getting one up on their peers, employees may miss out on the external competition, which is what everyone in the organisation needs to be watching for at all times. When the focus moves from external to internal competition the organisation is in serious risk of not mitigating market threats.
  3. Damage to the work culture: In a high internal competition environment, it often becomes every man for himself. There is low trust, respect and camaraderie among peers. This in itself is a recipe for low morale and attrition.

The Alternative

The alternatve approach that can take care of all these issues is to  move from “who’s the best” to “we are in this together” approach. Think of an ant colony or a bee hive. Every individual whether a worker or the queen has a role to fulfil and no one is more or less important than the other. The main goal is to sustain the well being of the colony or hive and in that lies the well being of each individual. While there are individual goals and tasks to be accomplished there is only one main goal that everyone is focussed on.

“When a team outgrows individual performance and learns team confidence, excellence becomes a reality.” – Joe Paterno

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