Team Competition Among Your Employees: Is It Good or Bad for Business?
The false promise of competition
Motivation is a frequent topic of discussion, especially when it comes to inspiring employees. Many believe that encouraging internal competition for recognition or rewards will push individuals to achieve more and boost overall productivity. However, within the automotive industry, ongoing issues like declining motivation and high employee turnover still persist, even with commission-based pay structures.
Why? Because eventually, people stop responding to motivational tactics. Those who report to a manager for performance feedback often become indifferent to traditional attempts to “fire them up”. But why does this happen?
Motivation is already within them
The truth is, your people are already motivated. When you treat employees as if they are unmotivated or indifferent to success, it often backfires. It can even breed resentment. A long time ago, psychologist Abraham Maslow taught us that all humans are driven by three core motivations:
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The drive to survive financially (to earn enough to live and thrive)
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The drive to belong (to feel valued as part of a group)
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The drive to achieve something meaningful (to feel a sense of personal success)
When you offer incentives for what someone is already naturally striving for, it can feel patronising. Employees may interpret this as a sign you do not believe in their intrinsic motivation. In some cases, incentives come across as manipulative or insulting. If people are treated like they are lazy, they might start behaving that way.
Why do managers keep using incentives?
Following World War II, the prevailing management theory assumed workers were inherently lazy. Managers believed employees needed carrots and sticks to perform. This belief led to incentive-based systems that rewarded top performers and threatened consequences for underachievers.
As a result, workplaces became filled with employees who felt:
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Disengaged from their leaders
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Emotionally distant from their teams
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Resistant to training and development
If you are seeing this dynamic in your dealership, particularly among commission-based staff, you are not alone.
How to Increase Car Sales by Encouraging Team Cooperation
Imagine competition among siblings
Let’s look at a family setting. Imagine parents who pit their children against one another, only praising those who recently achieved something noteworthy. The rest are given less attention, in the hopes that rivalry will push them to excel.
What happens? Over time, the children likely grow distant from their parents and each other. They stop offering help and support. Instead of building bonds, competition erodes relationships. This scenario mirrors what often plays out in dealerships.
The value of collaboration and synergy
When employees are constantly compared, ranked, and singled out, support within the team breaks down. Most employees begin to feel like they are falling short, no matter how hard they work. Eventually, this sense of underachievement shapes behaviour.
The outcome? Teamwork declines, communication fades, and the potential for synergy is lost. In contrast, when teams are encouraged to collaborate and share knowledge, everyone performs better.
If not incentives, what is the answer?
The answer lies in strong leadership. People naturally want to be led, trained, and challenged. Maslow’s framework tells us that the desire to improve is already there. The more effective your leadership, the less you will need to lean on rewards and threats.
What Australia Can Learn from Japan
Before World War II, Japan’s workforce was heavily incentivised and paid based on individual output. After the war, W. Edwards Deming introduced the idea of creating a cooperative work culture. Over time, Japan embraced this model, reducing internal competition and instead fostering teamwork and collective improvement.
The results were extraordinary. Japan became one of the most efficient and successful industrial economies in the world. If you are serious about improving your leadership approach, Deming’s work is worth exploring.
Lead with purpose, not prizes
Creating internal competition might seem like a way to spark energy and performance. But long-term, it often causes disengagement, mistrust, and fractured teams. Instead, focus on uniting your people with great leadership, clear communication, and mutual respect.
By shifting away from outdated incentive models and fostering a supportive environment, your dealership can unlock consistent performance, better employee morale, and stronger business results.
