A Competitive Path to Cohesion: Multilevel Effects of Competitiveness in the Sales Force

Link: https://doi.org/10.1177/00222429221113254

In a study of over 500,000 salespeople, Gallup Consulting found that competitiveness, or the “enjoyment of interpersonal competition and the desire to win and be better than others”, is an important trait among high-performing salespeople. To maximize revenue, sales managers often attempt to hire and harness highly competitive salespeople.

However, it is estimated that voluntary sales force turnover rates are twice the average for non-sales roles, and this turnover is responsible for over $536 billion per year in productivity losses in the U.S. alone. This raises a vital question: to what extent does hiring highly competitive salespeople – laser focused on demonstrating superiority over others – hinder the creation of cohesive environments? If every salesperson is seeking to outperform their peers, does it foster a cut-throat work environment where employees are less likely to work together. Most importantly, how will this affect salesperson turnover?

A working paper considers this ostensible dichotomy. While salesperson competitiveness could lead to increased motivation and performance, it also leads to a less cohesive work environment. On the flip side, work group cohesiveness leads to positive job attitudes – which could reduce turnover – but does this cause a loss of motivation and lowering of performance?

The authors conduct a field study utilizing multilevel, multisource data acquired from 358 salespeople working at a large company. They employ a model to test the effects of trait competitiveness on work group cohesion, along with subsequent effects on sales performance and turnover. The findings reveal a surprising positive relationship between trait competitiveness and work group cohesion, with the latter reducing the likelihood of employee turnover.

The results of the study offer three lessons for Chief Sales Officers:

• Leverage incentive structures that promote abundance and togetherness
  -Company-wide recognition at an annual event, monetary bonuses, and vacations
  -Tiered benefits for rewards to motivate staff to work harder
  -Incentive structures for different categories of skill and experience
• Develop an abundance mindset among employees: a perception that “everyone can win” and that the success of others does not impede an individual’s personal success.
• Develop a growth mindset to inspire a focus on process, progress, possibilities, and learning, and instill normative belief among staff that everyone can improve and reach their goals.
• Avoid social situations where individuals can target “win-lose” outcomes and see obstruction as beneficial; instead leverage structures that foster intrapersonal or intergroup competition as alternatives to typical interpersonal competition
• Choose low stakes social rewards that promote bonding (e.g., recognition and happy hours) as to activate competition to enhance outcomes