What March Madness can teach managers

03/26/09

Every March, the excitement surrounding college basketball reaches its peak, an event that is commonly known as March Madness.

Though March Madness may create a serious distraction for employees each spring in the form of office pools and streaming live video, the workplace can learn a valuable lesson from the yearly competition.

In a study based on basketball scores, professors Jonah Berger and Devin Pope at the Wharton School of the University of Pennsylvania found a surprising connection between the motivating factors in sports and what motivates employees in the workplace.

According to their study, “When Losing Leads to Winning,” college basketball teams that are behind by one point at halftime are more likely to win than teams that are one point ahead.

The researchers explain that the phenomenon may be more psychological that statistical:

“Losing can lead to winning because of the strong motivating effects of being close to your goal ... you may be willing to work harder to avoid a negative outcome.”

Pope and Berger suggest that like basketball players, employees should be more motivated and will perform better when they are close to, but still just short of, an important goal.

"Take any situation where someone is so close to a goal that they can almost taste it," Berger says. "The fact that they're almost there makes them work harder."

The findings directly tie into how we can modify employee goals to improve motivation. In the workplace, it may be best to set goals that are attainable, but slightly out of reach for employees.

Like the study shows, being behind by a few points (or sales numbers) can spark a significant increase in employee performance. When goals appear to be distant they may have an adverse effect on motivation and cause employees to feel discouraged.

The study offers an interesting look at the factors behind human motivation. In addition to setting a few “stretch” goals, managers who set more achievable goals for their employees may find more success in the long run.