How to Create Healthy and Beneficial Workplace Competition

While collaboration is a key part of any successful business, there is also a strong case to be made for the value of healthy competition amongst colleagues – but only when it’s implemented in the right way.


While collaboration is a key part of any successful business, there is also a strong case to be made for the value of healthy competition amongst colleagues – but only when it’s implemented in the right way. 

Most organizations know the importance of collaboration amongst employees and embrace it with open arms. In fact, according to research from Queens University of Charlotte, 75% of employers rate teamwork and collaboration as being very important – a fact reinforced by Salesforce data that shows 80% of businesses use social collaboration tools like team building to enhance business processes. But healthy workplace competition can be equally beneficial – although often overlooked – because it too can help bring out the best in people. It helps them grow, accept defeat, and learn humility. It also promotes creativity and often leads to innovation. Research from the Academy of Management suggests that the right type of competition can motivate employees, drive them to put in more effort, and achieve greater results. 

That’s why workplace competition is embraced widely by Fortune 500 companies worldwide. For instance, Thompson Reuters created a “catalyst fund” – an internal pool of money that internal innovation teams could use for doing rapid proof of concept on new ideas – to stimulate and encourage outside-the-box thinking. The kicker? The only way for employees to access it was to compete by presenting and defending their most compelling ideas to an innovation investment committee.  

Even the Department of Health and Human Services adopted a competitive approach to the work of bureaucracy as they created a “Shark Tank-esque” competition to incentivize innovation amongst government employees. In one instance, they invited 11 employee teams from all over the United States to give a four-minute pitch of their best ideas followed by five minutes of critique from senior officials drawn from the health department’s many branches. 

The only hesitancy that most companies have when it comes to workplace competition versus collaboration in the workplace is that, when executed improperly, it can bring challenging and negative implications. But the good news is that it can be done effectively, it doesn’t have to be difficult, it can be done in tandem with – and can even boost – collaboration, and it presents opportunities for amazing outcomes. 

Read on to learn more about the right and wrong forms of competition, nine ways to encourage healthy workplace competition, and four things to avoid doing to ensure it goes as planned. 

The Right and Wrong Kinds of Competition at Work 

When it comes to identifying and encouraging the right kind of workplace competition – the healthy and positive kind – there are some key things to consider: 

  • Healthy Competition is Exciting, Not Scary: A study conducted by The Harvard Business Review found that competitions where people stood to lose something created anxiety and negative results, whereas competitions where people stood to win something drew excitement. Healthy competition is based on incentives, such as bonuses. Negative competition is based on losing something, such as missing out on a promotion, or being put down for failing 
  • Competition Doesn’t Work for Everyone: According to Po Bronson and Ashley Merryman, authors of “Top Dog: The Science of Winning and Losing,” one quarter of employees wilt under the pressure of competition and become disengaged, another quarter aren’t impacted by it, and 50% of people benefit from it. This means that statistically, competition won’t be a positive motivator for every member of your team. 
  • Healthy Competition Isn’t Mandatory: Understanding that not everyone thrives in a competitive environment, it’s best if you ensure workplace competition isn’t mandatory. Certain job roles are competitive by nature, but those who don’t work well in those conditions won’t be forced to remain in them. Healthy competition should allow colleagues to opt in or stay out if they choose to do so.  It’s also important to understand and embrace the fact that some teams may be more competitive than others – for instance, a team of sales people may be more competitive than a team of web developers. So, if a particular team isn’t receptive to competition, don’t try to force a square peg into a round hole. 
  • Don’t Make Competition the End-All, Be-All: Competition that is perpetual and all-encompassing has been shown to have negative impacts. In the book, “Drive – The Surprising Truth About What Motivates Us,” author Daniel Pink shares that extrinsic motivators, such as competition and cash rewards, don’t last. Intrinsic motivators are what really drive performance – but there’s a way to leverage healthy competition for intrinsic purposes, too (more on that to come).  

Ways to Encourage Healthy Competition  

Understanding that there can be both healthy and unhealthy competition, how can you ensure you’re encouraging the right kind within your organization? There are some key tactics you can use to give your organization the best chance of benefitting from successful, healthy competition. Here are nine ways to do it. 

1. Encourage Healthy Debate, Shared Opinions, and Open Communication – One of the first key steps in encouraging healthy competition in the office is to create a work environment that promotes constructive debate, healthy conflict, and open communication. This is critical because it encourages team members to challenge and learn from one another, debate important topics, share opinions openly, and proactively bring their best insight to the table. In turn, this can be a catalyst for innovation and improvement.  

Effectively promoting healthy debate starts with creating a safe way for employees to communicate and proactively encouraging people to share their opinions – a task that should start from the top down. It’s important that leaders show employees that their opinions are valued and encourage them to speak freely but respectfully. It’s also important that they have a grasp on the fundamentals of conflict resolution (for more on this, check out our blog post: 3 Effective Strategies for Reducing Negativity in the Workplace). 

If you’re looking for a way to help your team to become stronger and more effective communicators, our Clear Communication training and development program provides tactics on how to enhance their holistic communications skills.  

2. Frame Competition Around a Specific and Beneficial Need – When you’re thinking of putting healthy competition into play at your workplace, it’s important that you focus it around a specific need – and one that’s beneficial both to your business and your employees. Open-ended competition can yield open-ended results. For instance, framing a sales competition around “being the best salesperson in the company” will be less effective than framing is as that “the first salesperson to close 100 sales will receive a bonus.” Whatever the competition might be, attaching a quantifiable and measurable metric for success will help bring value for both the employees and the organization. 

It’s also wise to openly communicate how the competition benefits the business and the employees, and how it connects with your company’s goals and objectives. By framing the competition in this way, you can stimulate a competitive angle while unifying employees under a common goal. This, in turn, helps eliminate the risk of creating a lone-wolf mentality among employees, which can often lead to negativity in a competition.  

3. Promote Healthy Competition with Team Building Activities – If you’re looking for easy, introductory ways to see how your team responds to healthy competition, then the right kind of team building activity might be the perfect trial. That’s because, by facilitating a light-heartedly competitive environment for your team where the outcomes are less serious than a real-world competition, you can gauge whether or not your team might be successful if you were to integrate a sense of competitiveness into the workplace. And you can also gain big benefits in the process – such as increased communication, collaboration, and comradery.  

At Outback Team Building and Training, we offer a huge array of team building activities that fuse collaboration and competition by splitting colleagues into groups that compete to be named the winners, including:  

  • Wild Goose ChaseWith this program, groups hit the town as they break out into teams for an interactive and competitive scavenger hunt where they get to explore the city and tackle challenges, earning points and competing to be crowned the winners. 
  • Corporate Castaways: Imagine your team being stranded on a remote island in a survival of the fittest scenario. With this activity, that’s exactly what they’ll do as teammates transform into tribemates and battle it out in strategic challenges in hopes of earning the coveted title of Corporate Castaway Champions.  
  • Cardboard Boat Building Challenge: In this activity, teams work to build fully functional boats out of nothing but cardboard and tape before testing them out in open water and competing in head-to-head aquatic challenges.  

And if you want to add an extra incentive and take your activity to the next level, consider taking things up a notch. Some of our customers have added in real-life rewards for the winning team – such as travel credits, cash, or high-value prizingThe one thing to be mindful of in this situation is ensuring that animosity doesn’t arise between teams since the stakes are higher.  Ultimately, the true goal of these team building activities is to have fun as a group, be collaborative, and get to know each other better.   

4. Set Finite Time Limits and Provide Prizing with Real Value – Some competition is good, but too much competition can be suffocating. Trying to maintain a competitive mindset 24/7 can be tough on morale. Daniel P Gross at Harvard Business School conducted a study that showed intense, short-burst competition brings out more creativity and better performance in people, whereas heavy and ongoing competition causes them to lose momentum over time.  

Consider creating shorter-term competitions with clear end dates and outcomes, such as quarterly sales competitions or a six-month innovation contest. Then, offer some time for employees to unwind and return to a collaborative mentality before digging into the next competition.  

It's also important for organizations to offer prizes or incentives that have real value to employees. At Outback Team Building and Training, for example, we offer sales bonuses to our team. And we also offer departmental, KPI-based bonuses across all areas of our business. 

5. Set Realistic Benchmarks and Provide Honest Feedback – Earlier in the article, we discussed how author Daniel Pink has shared research indicating that short-term extrinsic motivators don’t necessarily last in the long run. Rather, long-term intrinsic motivation – like the urge for a job well done – is what really drives performance. This indicates that the ideal scenario is a balance of short-term extrinsic competition with long-term intrinsic competition. But how do you go about doing this? 

The key to creating long-term intrinsic competition is to create a system of benchmarks, feedback, and open communication. It’s imperative to outline benchmarks in clear and specific terms and then conduct check-ins to make sure everyone’s still on track. Great feedback should be specific and timely, direct, unbiased, and goal-oriented and actionable (for deeper insights into providing effective feedback, read our blog post: 6 Impactful Tips for Mastering the Art of Managing People). By setting benchmarks and challenging employees to meet them, you’ll help stimulate healthy competition with themselves – which will ultimately lead to enhanced performance.  

And if you think you and your team could benefit from some formal training on this front, you might want to check out our Productive Feedback & Performance Reviews training program which can teach you to share feedback in a more positive and impactful way. 

6. Make Sure You Regulate Competition Closely –No employer ever wants to consider the possibility that their staff would ever act in any way other than completely ethically, but competition, when handled improperly, does have the potential to bring out questionable decision-making in people. It's important to ensure that there are safeguards in place to avoid dishonest means of achieving goals or misrepresentation of results.  

One way to do this is to automate the results. At Outback, for instance, we use Klipfolio to automate our sales team’s call volume, sales numbers, and closing percentage in real time on a screen located in our sales office. This lets everyone see where they stand and creates a sense of transparency across the entire department. 

7. Draw Value from the Process, Not Just the Results – No matter what happens in the end, it’s important to focus on the value that came from the competition itself – teaching new skills, connecting people across multiple departments, creating positive results for the organization, whatever it may be. In doing so, competition can actually unify individuals under a common goal.  

To do so, you can consider hosting debrief meetings after each internal competition to discuss what employees learned, gain valuable feedback and key learnings, and offer insights into how the competition – and the employees’ hard work – ultimately impacted the organization. It’s also important to revisit things that might not have worked out in a competition – there are valuable lessons that can be learned from failure which can be taken into consideration and actioned to ensure future competitions are more successful 

8. Create Dynamic Opportunities for Workplace Competition – Healthy competition doesn’t always have to take on traditional forms. It can be approached in unique ways and can actually be used for team building.  

For example, Clayton Homes, one of the largest homebuilding companies in the United States, transformed the work of their sales team into a fantasy sports competition. The organization treated their managers as “team owners” who then drafted sales reps onto five fantasy teams. Each rep earned points based on three factors: 

  • How many calls they made to high-potential leads 
  • What percentage of calls turned into a confirmed appointment at one of the company’s 1,000 retail stores 
  • How many of those appointments actually showed up at the store for their meeting 

Each week, different teams would go head-to-head, with the top four teams finally facing off in the championships. The results were a massive success: the inside sales team saw an 18% spike in outbound calls, doubled the percentage of calls that resulted in appointments, increased the number of transferred calls eightfold, and created a 200% increase in store visits tracked back to the sales team. 

You can also use non-business-focused means of driving light-hearted and beneficial workplace competition to help bring colleagues together and increase engagement. Consider things like fitness clubs or running groups, competitions for who can log the most steps (you can provide extra encouragement for people to participate by providing a step counter, like a FitBit, to employees who want to be involved), or even creating an in-house sports league, such as a softball league where each department is their own team.   

9. Celebrate “Winners” but Don’t Bring Down “Losers” – Previously in the article, we mentioned Harvard Business Review’s study on competition in the workplace which stated that competitions based on fear of losing something create anxiety and produce negative results. For this reason, it’s critical to celebrate winners but also to ensure you never bring down the “losers” of the contest.  

For example, a report by Paul Moore, former head of Risk Management at HBOS, in which he interviewed 140 bank staff, found that one branch actually had a “Cash or Cabbages Day” where employees who exceeded sales targets were publicly rewarded with cash, while those who missed their bonuses were given literal cabbages in front of the rest of the team. This is a perfect example of a competition that creates anxiety and fear rather than a competition that generates excitement and eagerness to participate.  

Instead, leaders should thank the team for their participation, celebrate the winner, and provide praise to runners up. Whether they’re in first place or last, their contribution to the competition likely provided some benefit to the organization and that should not go unrecognized. 

4 Key Things to Avoid in Workplace Competition    


While it’s important for leaders to understand how they can encourage healthy workplace competition, it’s equally important that they have a firm grasp on a few key things to avoid. Here are four things to steer clear of when it comes to encouraging workplace competition 

1. Don’t Let Important Things Fall by the Wayside – One of the big challenges that managers often bump up against when it comes to workplace competition is getting employees to remain focused on the bigger picture and continue working for the benefit of the organization rather than their own specific targets. To mitigate this, it’s important that: 

  • All tasks are targeted and benefit your business   
  • The right things are targeted rather than kicking up a competition about non-important tasks  
  • Competitions are targeted and specific – whether it’s closing the most sales or meeting pre-determined criteria for employee satisfaction within your own organization. For example, at Outback Team Building and Training, our Human Resources department works tirelessly to ensure our employees are happy at work. Each month, we send out an anonymous survey to our staff using Officevibe to gather valuable feedback about what’s going well and what could be improved, We also ask our team how likely they are to recommend Outback Team Building and Training as a great place to work on a scale of one to ten. We then use this feedback to calculate our Net Promoter Score. We strive to ensure we hit at least a 70 – a very high bar to meet.  

2. Don’t Let Workplace Competition Negatively Impact Morale – One of the quickest ways for competition to become a negative thing is when employees are forced to compete for necessities like resources, budgets, or time with staff in different departments. When you’re encouraging workplace competition, make sure you’re providing your team with the tools they need to succeed – whether it’s mentorship, technology, or support and guidance. 

3. Don’t Let Competition Spiral into a Toxic Culture: It is absolutely integral to ensure that workplace competition never takes a downward spiral into a culture of bullying or excessive work hours. The last thing you want is to have your team running themselves into the ground and working crazy hours, just for the sake of winning. Set parameters for competitions – such as cut-off hours for what qualifies – in order to keep things on a level playing field. Don’t discourage people from working hard but do put safeguards in place to ensure things don’t get out of hand. 

4. Don’t Force It: At the end of the day, it’s important to embrace that workplace competition simply may not be for all teams. Since every workgroup is comprised of a diverse range of individuals, it’s entirely possible that it just might not work out and may become a point of contention. One way to gauge whether or not competition will be successful is to gain an understanding of the personality traits of each of your employees. At Outback, we use DiSC assessments to get a deeper understanding of each of our team members’ personalities based on four main characteristics: Dominance, Influence, Conscientiousness, and Steadiness. With this insight, we have the ability to accurately gauge how a competitive environment would resonate with our employees. To learn more about DiSC assessments and their applications, you can find more information in our blog post: DiSC Explained: An Intro for Corporate Groups. 

And if your workgroup isn’t a competitive one but you’re interested in finding a more collaborative team building activity to help increase communication and comradery, we’ve got you covered on that as well.  


Learn How You Can Introduce Friendly Competition into the Workplace with Team Building   

For more information about team building activities to help kickstart a little bit of healthy competitive spirit within your team, just reach out to our Employee Engagement Consultants.  

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