Driven by envy — often as a result of misguided performance appraisal systems — employees focus more on undermining their colleagues’ success than beating the firm’s competition. Sensitive management of envy, however, can turn this negative energy into a force for good.
When envy pervades a company — when employees and managers for one reason or another focus more on competing against each other instead of the company’s marketplace competitors — the result is a dysfunctional organization whose effectiveness and efficiency is greatly undermined.
For example, various explanations are given for Microsoft’s failure to compete effectively against Apple’s iPhone or even Xiaomi’s less advanced and cheaper version of the iPhone, as well as the failure of its search engine Bing to challenge Google. For INSEAD professor Quy Huy, however, simply stating that Microsoft lacked a culture of innovativeness does not go far enough in explaining the setbacks. Instead, Huy believes that Microsoft’s stack ranking performance system, which set up a deep culture of envy among employees, should bear much of the blame.
Under the stack ranking system, every department must identify its ‘top,’ ‘good,’ ‘average’ or ‘poor’ performers — and a certain percentage of employees had to go into each category. One in ten employees, therefore, would inevitably end up in the ‘poor’ category, which put them next in line for unemployment when there were cutbacks.
The results, according to Huy, is that it became more important to beat the internal competition — the other employees jostling for position in the ranking — than the external competition. Any advance by an employee — for example, through a successful project — was greeted by envy and resentment by the other employees.
Competition among employees can manifest itself in many ways. For example, employees might refuse to cooperate with each other. Or employees might actively undermine other employees by fighting what might be good ideas or even spreading malicious gossip.
Of course, no employee will admit to being envious. There’s a certain element of weakness in the emotion; it can be demeaning to be envious. Perhaps these employees may not even admit the envy to themselves. They simply believe that other employees are undeserving of the success they are reaping — and their subsequent advantage in the ranking system. The poisonous result is the same: employees feel justified in undermining their counterparts in any way they can.
Envy does not only exist at the individual level. It can also exist among departments or teams within a company, or even among executives in different companies (CEOs envious of other compensation packages, for example).
With the right steps, executives can manage and even channel envy so that it increases focus, motivation and energy without undermining the organization.
The first step is to acknowledge the existence of envy and its potential harm. This falls on middle managers who must not only recognize that envy will exist among their employees, but also recognize that this envy is an important problem that needs to be addressed.
The next step is to root out the envy. This requires complete transparency from employees, which can only occur if they feel that they can share their feelings with their managers in complete confidentiality, and with no repercussions.
When employees communicate feelings of envy, managers should respond with complete empathy, and then make constructive suggestions. For example, managers might suggest that employees look to emulate those they envy as a way to achieve similar goals. At the same time, managers should approach the envied employees and suggest, while not disclosing the genesis of the suggestion, that they coach the envious employees. The envied will thus feel more proud of their achievements, while the envious will feel more secure and more committed to the organization.
At the same time, top executives need to address the systemic roots of the problem. Instead of unwittingly encouraging employees to undermine each other, for example, performance systems should reward collaboration. Even emulation — either at the individual or inter-departmental level — should be rewarded.
A company’s high performance orientation doesn’t have to result in harmful internal competition. If emotionally intelligent managers know how to reposition employees’ feelings of envy so that the envious feel that their professional development is supported by the organization, the negative energy of envy can be converted into positive motivation.
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