My partner and I own a successful real estate company. We specialize in second homes, vacation properties, and the like. But I wouldn’t say we “sell land” so much as we offer investment opportunities.

Recently, my partner and I decided to hold a sales contest at our [CITY REDACTED] branch. Their numbers have been down as of late, and I figured this would be a fun way to motivate the troops. We even sent our top salesperson to roll it out. He’s super sharp, by the way. He’s always coming up with these clever mnemonic devices to drive sales, and he likes to joke that “coffee is for closers”. Hilarious! Anyway, first prize was a new car, second prize was some high-quality cutlery, and we let him choose the third prize. Well, wouldn’t you know, one of the sales reps broke into the office that same night and stole the contact information for some potential clients! Can you believe it? In the end, we caught him – but how’s that for gratitude? My partner and I paid good money for those leads! I mean, what’s the matter with some people?!? – Sincerely, M.

First of all, I share your frustration.

It doesn’t matter what your beef is with your employer, there’s absolutely no excuse for stealing, or making them the target of illegal action. I assume you summarily dismissed the culprit, and will press charges.

Nevertheless, there may be a lesson in the episode you describe.

Competitions like the one you set up can indeed be an effective way of ‘motivating’ workers. For the duration of the contest at least, employees have even more reason to give it their all. But once it’s over, and the prizes have been awarded, people tend to revert to their previous levels of effort. As Alfie Kohn laments in Punished by Rewards (1993), not only do contests like these fail to bring about lasting change, ‘the more rewards are used, the more they seem to be needed.’[1] If you’re not careful, in other words, in the future you may find yourself relying on sales contests just to maintain the status quo.

Still, there is something appealing about the strategy. It’s probably because it feels vaguely capitalistic.

Markets are, after all, about competition, and besting one’s rivals. Businesses that are better—that is, which offer superior products, services, or greater value—tend to ‘win’, while those that don’t, or can’t, can expect to fail. Creating a similar sense of competitive pressure within the organization would seem appropriate – perhaps even beneficial.

But that’s not quite how things work in the real world.

Not only is the motivation provided by a contest temporary, as Mr. Kohn points out, they may actually stifle organizational learning, and diminish productivity. Should one of your salespeople come up with a particularly effective sales technique, for instance, there’s nothing to be gained by sharing it with colleagues. In fact, in the context of a sales contest they’re actually better off keeping it to themselves. Information that would obviously benefit the organization as a whole is instead is secreted away.

Sales competitions are also problematic because winning is usually defined in relativistic terms. One need only do ‘better’ than one’s colleagues. Or, to put it another way, you can just as easily come out on top by ensuring your coworkers do worse than you. It’s not hard to imagine your less principled salespeople contemplating all sorts of questionable or nefarious actions just to give themselves an advantage – or put their colleagues at a disadvantage. You imply that your contest may have prompted this burglary. Based on the timing of the events, I’m inclined to agree. Your thief may have been motivated to steal from you simply in order to improve their chances of winning.

This inclination to cheat may be compounded by how such contests are experienced by the rank-and-file, which is more like a de facto performance appraisal. Sure – for you and your partner it’s all fun and games. No matter who wins, your goal of increasing sales at the branch is almost sure to be achieved (if only temporarily). But for your sales reps, a poor showing may leave an impression that lingers well beyond the contest’s end. Much more is at stake than a car or a box of steak knives, in their eyes. They may even feel their very jobs are on the line (as ridiculous as that sounds).

Finally, consider that when it’s all over, only one of your employees is going to feel like a winner while everyone else is going to feel like a loser. This could damage organizational morale more than you realize. I’m reminded of a passage from In Search of Excellence wherein the authors ascribe the extraordinary success of IBM in the 1970s in part to a policy of setting sales goals so that almost all of their salespeople could achieve them.

Why?

Because ‘label a person a loser and (he or she) will start acting like one.’[2]

You and your partner would do well to remember this…no matter how you choose to motivate your sales reps in the future.

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[1] Kohn, Alfie. Punished by Rewards. 1993. (New York: Houghton-Mifflin), p. 17.

[2] Peters, Tom and Robert Waterman. In Search of Excellence. 2004, 1982. (New York: HarperBusiness Essentials), p. 57.