All-or-nothing: Is competition good for the workplace?

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Participants were less willing to cooperate and demonstrate trusting behaviour after competition was introduced to social dilemma situations they faced.

Competition has long been viewed as an effective way to promote progress. A recent study, however, showed that emphasising too much on competition in the workplace could affect people’s social interactions in the long run and lower their ability towards teamwork and cooperation.

Co-written by Jaimie Lien, Assistant Professor of Business Economics in the Department of Decision Sciences and Managerial Economics at Chinese University of Hong Kong (CUHK) Business School, Prof. Jie Zheng at Tsinghua University, and PhD student Yilin Zhuo at the University of California, Los Angeles, the study The Cooperative Consequences of Contests has examined the effectiveness of competition as a motivational tool and how well people who are driven to compete with each other are able to cooperate in achieving organisational goals.

More than 100 participants from Tsinghua University were recruited for the research and the results suggested that the more competitive people become, the less likely they are willing to cooperate with others.

Social dilemma: Individual profit or group’s interests comes first?

The participants were paired up randomly to take part in social dilemma games, before and after engaging in different forms of competitive reward schemes for a laborious task. They had to engage in competition with one another over real rewards in between the social dilemma games.

The research aimed to test whether different reward schemes would induce more or less competition among the participants. The team compared the participants’ willingness to cooperate before and after competition was introduced, in order to see how people behave when they are faced with choices that either promote individual profit or the interests of a group.

Apart from the baseline setup in which participants were paid a fixed reward for each task completed, three other reward systems were also introduced:

• Pure winner-takes-all scenario: The participant who completed more tasks than their partner received the entire reward, while the other participant got nothing.
• Tullock contest: The winner was randomly picked and the winner still took all. The best performer who completed more tasks would have a higher chance of getting picked as the winner, although the win was not guaranteed.
• Proportional prize contest: Each participant was rewarded according to the level of effort they put into the task, as compared to their partner. Sharing the prize fairly was possible if both participants performed at similar levels.

The results showed that participants’ willingness to cooperate across the social dilemma situations, which were designed to measure cooperative and trusting behaviour, declined as a whole after introducing competition.

Surprisingly, the third reward scenario, which seemed to be a fairer arrangement, led to less cooperation among participants in the social dilemma contexts. According to the results, the participants’ tendency to cooperate fell the most in the classic Prisoner’s Dilemma game, which tests individual interest against joint effort toward the common good, under this reward scheme, from 58%to 19%.

“This result is quite surprising and somewhat counterintuitive in that people actually reacted in a more competitive manner when faced with a relatively less competitive payment scheme,” said the report.

“When they were presented with the opportunity to split the prize fairly, they did not seem to take it well once cooperative opportunities later arose. The results seem to suggest that people were more accepting of winner-takes-all situations that we originally thought.”

Ambition makes people selfish

Prof. Lien explained that when the reward scheme was based on each participant’s effort relative to their partner’s, it is theoretically possible for the prize to be shared evenly, but participants may not necessarily realise that this is possible. Instead, the participants became more selfish under this framework because they believe that they can win a larger share of the prize by working harder.

By contrast, the participants were more willing to cooperate in the two other winner-takes-all scenarios since sharing the reward prize was not even possible in those scenarios.

The study showed that individuals’ efforts and subsequent tendencies in social situations are highly responsive to the competitive environments they faced.

Most importantly, the researchers highlighted that the participants in the study remained competitive even when they did not interact with the same opponents in different games. That means that the competitive situation can shape people’s general attitude by steering them away from cooperation.

In addition, the study found that the participants who claimed themselves to be highly ambitious and worked harder to win, behaved more selfishly and were less willing to cooperate in social dilemma games.

“It has a negative implication for society because the social dilemma games represent situations in which individuals can potentially cooperate with one another to create more resources for everyone, but those who want to win badly tend not to do that,” said Prof. Lien.

“Also, an overemphasis on competition can affect people’s social interactions in the long run, such as having less trust towards strangers and less willingness to contribute to public goods.”

The "involution" or ("neijuan") phenomenon: Internal bottomless vicious cycle of competition

The Asia workplace has always been highly competitive, especially in China. The winner-take-all, big-fish-eat-small-fish competitive workplace culture promiment in many areas has contributed to the country’s strong economic growth, but also been blamed for harming employee wellbeing, notably in the booming tech sector where the notorious "996 culture" (i.e. working from 9 am to 9 pm, 6 days per week) is a common phenomenon.

Prof. Lien said the buzzword "Neijuan" (roughly translated to involution – an anthropological term that can be understood as the opposite of evolution) is trending in Mainland China in recent years to describe the competitive circumstances in academic or workplace settings in China. To compete for the same limited resources such as limited promotion opportunities, people are pushed to overwork due to the raised standards caused by their even more hardworking peers, resulting in a vicious cycle of internal competition.

As shown by the study results, people behave differently under different reward schemes. Prof. Lien said the constant competition without carefully designed reward schemes in the workplace context could lower people’s ability for teamwork and cooperation and extend to 'softer' forms of competition which (perhaps counterintuitively) may even make things worse.

She added that companies should focus on finding the best reward scheme from a behavioural point of view, balancing the incentives for performance, and maintaining a cooperative workplace environment to bring out the best features in people when competition is unavoidable.

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