February 4, 2011

Where sports and business diverge

How urgency of purpose can inspire your workforce

Fred Mael

“Professional sports are a microcosm (or reflection) of society.” Usually, this sports-business parallel is used to explain or justify athletes’ dysfunctional behavior such as substance abuse, sexual assault, greed, or gambling. Away from the headlines of scandal, however, there are key differences between how human resources are managed in professional sports compared to most other business endeavors. By examining these, we might better evaluate what business could learn from sports. Here are some examples:

Pay equity. External pay equity – using the salaries of comparable players on other teams as a basis to negotiate pay raises – is a more dominant consideration in sports than in business. No owner could hope to sway a player to take a lower salary by claiming that salaries across all professions or the cost of living in his market are typically lower than those in New York or Los Angeles.

Conversely, internal equity – paying coworkers at comparable pay rates according to their position in the organization or their seniority – is unheard of in professional sports. It is understood that one player may make 100 times more than a teammate at the same position. Unlike the world of work, this lack of internal pay equity is not considered devastating to team cohesion. Contrary to the predictions of equity theory, these pay disparities do not usually lead lower paid players to reduce their efforts or contributions.

Roller-coaster pay. A third unique aspect of professional sports compensation is that players may be asked to take huge pay cuts in order to join or remain with a team, often not because of the player’s failings but because the organization’s pool of money has already been earmarked for other high-paid players. This is highly unusual in work organizations; an overpaid employee is usually fired rather than being given the option to work for significantly less.
Turnover and continuity. Employee continuity and minimization of turnover are considered desirable in most businesses, and there is even evidence that it is important for customer loyalty. By contrast, the trend in sports has been away from player stability. It is not uncommon to have 30% turnover of personnel between seasons in the National Football League. Recently, other sports have seen a spate of late-season “fire sales” in which non-contending teams sell off some of their most popular, talented but expensive players to better performing teams. In the private sector, such continuous shuttling of players in and out of the organization would be considered disruptive to cohesion and morale. Yet despite grumbling from some fans and media members, attachment to teams seems to override the impermanence of players.
Managerial job security. In many work organizations, those in positions of responsibility typically have more job security than subordinates. In a clash between a worker and a manager, the more junior employee is more likely to be removed or transferred. In professional sports, however, capable players will tend to have more job security than managers, in part because they may earn more than managers and are more visible fan attractions. Moreover, managers and coaches will be blamed and held accountable for dissension on the team or for player motivational failings, unlike work managers who are more able to blame employees for their uninspired work.
Managerial discretion. On the other hand, sports managers may have greater control over an employee’s ability to perform than business supervisors. A manager can relegate a player to the bench or the “doghouse” and deny him playing time. By contrast, a typical supervisor is less able to justify having an employee sit and do nothing.
Performance appraisal. Professional athletes are under constant scrutiny whenever they work, and their results are usually quantifiable, even in the short-term. Moreover, their efforts are easily videotaped, reviewed and scrutinized. The result is a process of continuous performance analysis, critique, and improvement. This is in sharp contrast to the yearly performance appraisals in most organizations. Even if desired, it would be impossible to film, quantify, and judge the performance of managers, scientists, accountants, or other professionals on a daily basis.

Why does it work?

Thus, professional athletes playing team sports play in an environment in which players have no internal pay equity, potentially wide pay swings, little job stability, regular changes of teammates, the possibility of doing nothing but watching for long periods of time, constant public scrutiny and second-guessing, and continuous appraisal. Yet by and large, teams manage to function and prosper, some remarkably well. Despite oversized egos and in some cases entourages of hangers-on, most professional athletes perform in a cohesive fashion. The many problems associated with professional sports and professional athletics do not seem to center around their human resources practices, even though those practices seem to break many accepted rules.

Perhaps the secret lies in the fact that everything matters in sports, and that everything counts. The constant scrutiny of players’ performances provides sports work an urgency that is missing in many other work environments. The clear tie between individual performance and group outcomes can foster short-term cohesion that compensates for pay inequities and personnel turnover. The regular resolution of group effort – daily wins and losses, clear yearly measures of team success – can galvanize team members to pull together and work cohesively.

This should be informative for business leaders. Employees crave purpose. They want their work to matter, both for themselves and for the success of the whole – they want to know that it matters. They want to identify with their company. Instead, they often get the message that their contributions aren’t important, and that one’s highest priority is catering to or flattering the boss or staying out of the way. A prime example is the yearly performance appraisal, during which employees may hear about problems that had occurred months ago and were saved up for the appraisal discussion. Conversely, many managers will completely whitewash employee problems in order to curry favor with employees who come to see positive evaluations as their entitlement. Many employees know that they will rated as good performers well even when they feel empty and ineffective, and that their pay and job stability are not tied to their contributions. In this vacuum of meaning, they fixate instead on internal pay equity and jealousy over symbols of advancement, further squandering their ability to contribute.

To provide employees with a clear, regular rationale for why and how their efforts contribute to the organization is a crucial communication function of leaders – not something that can be satisfied by wall plaques claiming that “people are our most important resource”. Not having Super Bowls and playoffs (or even the Color War of summer camp) to energize staff, the business and non-profit leader may need to make the case for individual contribution more creatively and more regularly. Goal setting at all levels, better performance metrics, more frequent informal appraisal can all contribute as well. The results may be well worth it – just look at what purpose and urgency do for athletes, those people who are supposed to be the microcosm of society.

Fred Mael (www.maelconsulting.com) is an organizational psychologist who does consulting in areas such as talent retention, organizational culture, and performance management, as well as executive and work/life coaching. This article appeared in the September 2003 issue of Baltimore SmartCEO magazine.

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