Scientific results show both a positive and negative correlation between rivalry and performance. What is behind this and under what conditions does competition promote performance?

By Klementine Klein

We commonly understand competition and rivalry as a situation where the desired outcomes of the two parties are in direct opposition to each other: One wins and someone else loses.

Studies support this understanding. They also show that the pressure of rivalry has a negative impact on performance. Employees feel constrained by rivalry, and setbacks lead to demotivation. At the same time, studies from the last three decades show that competition can strengthen motivation and performance (Levchenko et al., 2019). So what is true and what conditions must be in place for competition to have a positive effect on the overall result?

A study by Johnson, Holleneck and colleagues (2009) illustrates that direct competition between two teams or colleagues can develop in two directions: Either into a pattern of collegial competition, called “friendly competition”, or into one of the rough-and-tumble type of collaboration, called “cutthroat collaboration”. In friendly competition, employees motivate each other and learn from each other. This results in sustainable performance improvement – at the individual and team level. In contrast, employees in a “cutthroat collaboration” environment spur each other on. However, they only work together when everyone benefits and they prioritise their own performance over that of the team or the larger goal.

Creating a culture of friendly competition

In order to reap the benefits of rivalry, companies need to create an atmosphere in which “friendly competition” prevails – or at least ensure that “cutthroat collaboration” does not take place within teams, but only across teams (Oțoiu, et al., 2019). The study shows that the order in which the culture develops significantly influences outcomes. Once teams get into a mode of direct comparison and competition with each other, it is difficult to get out of that mindset. Future collaboration is more difficult. However, once the team is working closely together and the employees have built trust in each other, competitive elements can be an incentive to outperform each other. The starting point of the relationship is therefore crucial for the potential of friendly competition.

In practice, the start of a relationship between employees or teams is often not controllable, because with ongoing changes in companies, new constellations arise again and again. How do companies and managers nevertheless create the right atmosphere for “friendly competition”?

Culture follows structure

For a culture in which employees trust each other, help each other and at the same time motivate each other to perform at their best, the structural elements must support such a culture. Performance management and performance measurement in particular play an important role here. In an environment that only measures and rewards individual results, it is difficult to see fellow workers as potential allies. However, if there is a culture of cooperation and collaboration, rivalry can lead to colleagues motivating each other without being demotivated by individual setbacks. Team success is in the foreground here. In concrete terms, this means that companies should focus on team goals in order to strengthen “friendly competition” in their teams.

Besides the structural influence of performance management on the potential of “friendly competition”, the personal relationship between competitors plays a crucial role. It is easier for employees to grant success to fellow competitors if there is a personal connection beyond the working relationship. In addition, the manager in a coaching role can have a great influence on the atmosphere in the team and the attitude towards competition and competitors.

In summary, the studies show that rivalry can have a positive impact on performance when it takes place in a context of “friendly competition”. Such an environment can be strengthened by communicating higher-level team goals, promoting extra-professional relationships between employees and a coaching manager.