The Tournament in the Workplace

By Aaron Agostini

            I first encountered the idea of “the tournament” in Tim Harford’s book The Logic of Life (where the information in this article largely comes from). The tournament is a method to find the best person relative to a specific group of people. Its obvious implementation is sport tournaments. Teams or individuals play each other, with each winner moving on to the next round. Finally, only one remains, and they are the winner. Economists feel that there is a similar tournament going on in modern workplaces. The competition, unfortunately, can bring out the worst in people’s behavior, instead of only their best performance.

            What, exactly, is a tournament like in the workplace? After all, there isn’t a champion that wins all the potential salaries that would be paid by a given employer. The tournament, described by Harford, is the competition for bonuses, promotions, and other perks that can be bestowed by a manager.  Very often, only a few or even one person is eligible for the biggest bonus, and senior roles and management promotions can only go to one person. This is awarded to whoever is viewed to have done the best job. This can bring on some unhealthy consequences, though. Workers may not want to help one another, because that lessens the chance of winning the big prize. Or worse, may even resort to sabotage.  The big payday might not even be successful in rewarding the best member of a team. Someone might get lucky with the project they’re working on being higher profile or more successful for reasons other than their own efforts.

            Winners of the tournament might not even be motivated for being more successful once they reach a certain level. The tournament theory suggests in these cases that this is all a part of the reward. Underlings see a higher-up for (in their eyes) “doing nothing”, and yet receiving a much bigger reward for their work. The payoff doesn’t serve to motivate the person in the position of prominence, but for the people in the lower ranks to achieve the position when it’s finally vacated. In this line of thought, a total layabout is worth being paid a six-figure salary if they in turn inspire others to work harder and more productive, as long as the salary paid is less than the productivity gained.

            Thankfully there are ways to adapt the tournament to be more productive for the organization. One is make sure that teamwork is rewarded. Overall productivity is lower when teammates don’t help one another, so it makes sense that the tournament winner is the best teammate. This holds true for the positions of leadership. The salary should certainly spur people on, but it should also inspire the person in the position to bring about even greater productivity. The cynical assumption of the tournament is that people are motivated to do just enough for their work, but no more. In the right environment, though, it could be modified to deliver greater productivity and teamwork.