Everyone claims to hate it, yet it still exists: office politics. Here are 3 quick tips on how to avoid office politics in your company, based on what I learned reading The Hard Thing About Hard Things by Ben Horowitz.
1) Hire people with the right kind of ambition
Not all kinds of ambition are created equal. You have the right kind and the wrong kind.
People with the right kind of ambition aim to further their own development by pursuing the company's interests. The wrong kind of ambition is furthering your own interests regardless of its effect on the company.
So make sure you hire people of integrity whose values align with the company's mission. Ideally, they have some form of intrinsic motivation to work at your company in particular.
2) Align company and employee interests
If you want those people with the right kind of ambition to work for you, they have be able to trust that if they do their job well, good things will happen for both the company and for them personally. This part is absolutely critical.
If you systematically underpay your employees as long as they let you get away with it, you are incentivizing them to go out and manufacture a better job offer somewhere else, so that you will give them the raise they deserve.
This will send the message that the quickest path to a pay raise is not stellar performance, but talking to competitors. So you will end up promoting the politically adept over the productive, which will be absolutely killing to the long-term health of your company.
3) Standardize the evaluation and promotion process
Even if you don't underpay your employees, some politically inclined employees may still try to play political games to further their own career. The best defense against this is to have a transparent system in place for dealing with raises and promotions.
If you have transparent system in place, every employee knows what's expected of them, what kind of behavior will warrant a pay raise or a promotion; and when exactly the time is, when this stuff gets discussed (e.g. yearly)
This way, you at least create the illusion that pay raises and promotions are based on merit and not on political favors. It will also make sure that you won't be confronted with an employee trying to leverage a job offer elsewhere for a pay raise in the middle of the year. Because if it's against company policy, it's just not happening.
These 3 quick tips were based on what I learned reading The Hard Thing About Hard Things by Ben Horowitz. A friend of mine highly recommended this book, and I definitely second that. This is a book you want to have read at least once, if you are (or aim to be) in any kind of management position.
If you get the book just for the part about office politics, you will find that part in chapter 6.