Employee Tournaments: One Size Does Not Fit All

• Published in: Management accounting quarterly 2021-03, Vol.22 (3), p.1-9
• Main Authors: Kersting, Lee, Krumwiede, Kip, Marley, Robert, Mellon, Mark J
• Format: Article
• Language: English
• Subjects: Business enterprises; Contests; Design; Employee motivation; Employees; Feedback; Fines & penalties; Gamification; Labor productivity; Management; Management accounting; Managers; Measurement; Performance evaluation; Performance management; Productivity; Social aspects; Talent management; Tournaments & championships; Vacations
• ISSN: 1528-5359; 2577-8811

As the trend toward gamification in business increases, so has managers' use of tournaments to achieve productivity gains and foster innovation. Associated with this growth in tournament usage is the need for managers to have a greater understanding as to how tournament design choices can enhance or detract from such gains. In addition to synthesizing much of the tournament design literature, we elaborate upon an experiment that examines the effects that tournament horizon and differences in ability among employees have on employee productivity.Imagine a world without well-designed tournaments: The Super Bowl would be less super, the World Cup far more controversial, and Dancing with the Stars would fail to launch. Well-designed tournaments like these permeate not only popular culture, but also business environments. Well-designed tournaments lead to greater productivity and improved profitability, whereas poorly designed tournaments lead to employee frustration and lost opportunities.From sales and service to merchandising and manufacturing, tournaments are used not just to increase employee productivity, but also to foster innovation. For example, the X Prize is a tournament used to advance private space flight, while the DARPA Grand Challenge is a tournament used to develop technological breakthroughs for autonomous vehicles. Although tournaments are widely used in business settings, their use is predicted to increase even more as employers turn to gamification, the use of gaming environment techniques, to tap into Millennial-generation employees' intrinsic motivations.1As the business environment continues to evolve over time, mechanisms by which gamification occurs, such as tournaments, have seen increased usage. The increased use of tournaments, in particular, poses a call for managers to become aware of tournament design issues. A review of the IMA® (Institute of Management Accountants) Management Accounting Competency Framework provides further support for this viewpoint. Three of the six domains identified in the framework incorporate competencies associated with possessing a knowledge of tournament design, including (1) strategy, planning, and performance, (2) business acumen and operations, and (3) leadership.Each of these three domains ties into enhancing performance of the organization in different ways. Particularly relevant to this article is the enhancement of talent management that can result from the use of tournaments. The performance ma