Competition : Part 3

Increasing Efficiency In Business: A Contribution to the Psychology of Business
by Walter Dill Scott, Ph.D.

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In answers by equally successful managers great diversity of opinion prevailed. Some men were afraid of all forms of competition.

They believed that cooperation was essential to success and that any form of competition among the men tended to lessen such cooperation. Most of the men interviewed believed that competition when wisely handled is very effective in stimulating the men.

Of course, most firms try in some way to encourage their men to excel their record of previous years. The inquiry developed, however, that a few are unwilling to employ competition even in this mild form as a means to increased efficiency. Most of the firms made conscious use of this principle and were convinced of its potency.

Competition between men in the same department was approved by a majority of the firms, and its adaptability to the selling department was especially emphasized. But some of the best houses will permit no such competition. The diversity in opinion was very pronounced in answering this question.

As to encouraging competition between departments in the same firm, no general answer is satisfactory. Organizations differ widely. In many houses such competition is not practicable; in others it certainly is not to be encouraged. In many organizations which would admit of such competition the experiment had not been tried. In others it has become a regular practice and is looked upon with favor.

In competition between members of the same department or between departments the danger of jealousy and enmity seems to be so real that the greatest caution has to be observed in managing the contests. When such caution is exercised, the results are ordinarily reported upon favorably.

As to encouraging competition with departments of rival establishments, the diversity of business makes general statements un- illuminating. Even where such a course is possible, some managers reject the practice as unwise. They believe that it is not best to recognize other houses or to consider them in this particular. A few firms report that they are able to stimulate their men successfully in this way, even though the conditions for such a contest are difficult to handle. Of those who utilize competition a few houses employ no handicaps to put their men on the same level and make success equally possible to all.

The principle of handicaps is so manifestly fair that organizers of contests can hardly afford to neglect this essential to the widest interest and participation in the competition.

If the little man in a country territory doesn't feel that he has a fighting chance to equal or surpass the man in the big agency, he makes no attempt to qualify. And the purpose of every contest, of course, is to get every man into the game.

Touching monetary rewards for the winners, there is practical unanimity of opinion. The winner should receive a prize in cash or its equivalent. Usually the effort is to distribute the prizes so that all who excel their average records receive compensation and recognition for the additional work. In many instances unusual increases in sales or output are rewarded by a higher rate of compensation.

That success in contests should influence promotion was generally agreed. The knowledge and energy shown are indications of capacity to occupy a better position.

The contest merely reveals such capacity; the promotion might well follow as part of the prize for the winner or winners.

Public commendation of winners in competitions is held by many firms to be bad policy. There is fear that such commendation might render the participant conceited and unfit for further usefulness. A majority of firms, however, give the widest possible publicity to such commendation. This, indeed, is the reward most generally used and apparently most keenly desired by employees. Reproduction of photographs of the winners in the house organ with an account of their achievements is the commonest acknowledgment of their success, though posting the names of the winners in various parts of the establishment is the method employed by smaller houses.

Many important houses use competition as part of their regular equipment for handling and energizing men.

Particularly is this true of manufacturers and distributors of specialties, patented machines, trade-marked goods and lines, and wholesalers whose travelers are selling in territories where conditions are generally the same. Several firms of this sort make conscious and elaborate use of the instinct of competition in their ordinary scheme of management.

A concrete and typical illustration of its application to selling is afforded by the experience and the undoubted success of one of the largest specialty houses which distributes its products direct to the consumer. The sales force numbers about 500 men, and executives of wide experience declare that the organization is, of its size, the most efficient in the United States. Analysis of this company's methods is most illuminating and suggestive because every phase of the instinct of competition has been exploited to the advantage of both the house and its employees.

About the Author

Walter Dill Scott (1869-1955) was one of the first applied psychologists. He applied psychology to various business practices such as personnel selection and advertising. In 1900 he was appointed instructor of psychology and education and director of the psychological laboratory at Northwestern University. In 1905, Dr. Scott was made professor of psychology and head of the department of psychology.