Fear leads to disaster. People are naturally motivated when they are able to do their best possible work in areas that truly interest them. Internal competition is healthy, necessary and good. Internal competition is detrimental. Replace competition with collaboration.
People are commodities.
Each has an essentially fixed set of strengths and weaknesses and must therefore be assigned to a fixed role in the organization. People are never commodities. Each is a unique individual with much to contribute if only the system will allow it. People can and do grow and change and so must have choice in their work. Efficiencies are highest and costs are lowest when people are assigned to the same tasks for months or years at a time.