The Best Option
Option 3: Rigorous Performance Tracking
HIGHLY RECOMMENDED
What exactly needs to be tracked varies with the type of business you are involved in. You might track the amount fof work each employee completes in a given period of time. You may periodically quality-check their work and give it a grade, which can be as simple as ABCDF or as complex as a numerical value from 1 to 10000.
Provide employees with progress reports and statistics. Reward those who break their own performance records; but even without rewards, most people are naturally inclined to want to improve.
This way, employees are competing with themselves and not each other. Keep the records private, but know that word is likely to get around as employees chat. However, it will be the employees who decide whether or not to share their numbers with others. Don't be too surprised if they start competitions or bets with one another of their own accord.
This method does not rely on terror (criticism/threats) or intimidation (direct competition with other employees). It is so much better for morale.
Bonus: If you've never tracked performance so closely, you'll be glad you did. Even if you have an all-star staff, you now have reports on each of them. Suddenly it's a snap to identify employees' weak points, areas where many employees may need more training, or even company procedures that merit overhaul.
P.S.: Make it a game. Everybody loves fun. Fun is nonthreatening and improves morale.
For example, if you host a company competition to see who can close sales the fastest, you need a visual, public display of how things are going. This could be charts or graphs taped to the wall, but you might as well be a little creative. It could be a Candyland board where each employee has a piece and each square represents a sale. There may even be candy rewards involved... :)
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