Curving grades without creating competition among students
I think you're onto the right approach with the idea of a curve that only helps.
Based on your description, it sounds like you are in the United States. If so, the simplest way to do this would be to compute twice:

Use the standard US metric of A=90%-100%, B=80-89%, C=70-79%, D=60-69%, F&lt;60%.
Apply the curve.
Give the student the maximum of the two grades.

If you put together examinations that are far too difficult, then you may still have a problem. No matter what, however, a curve can only do so much to save you from this mistake, however, since overly difficult exams will also tend to increase the arbitrariness of assessment.
One other thing that may help in setting the curve is a trick I learned from the professor that I TAed for while in graduate school. When determining the curve, he also included all of the students who dropped the course. In a big undergraduate course, there were always a decent number of these, and they would generally be doing worse than the students who at least stuck it out to the end. The dropping student thus generally absorbed the failing grades at the bottom of the scale (except for a few deserving cases) and took the sting out of the curve for the students working hard but struggling in the class.