Academic journal article The Sport Journal

As Goes the Spoils, So Go the Victories: Exploring Major League Baseball's Playoff Bonus System

Academic journal article The Sport Journal

As Goes the Spoils, So Go the Victories: Exploring Major League Baseball's Playoff Bonus System

Article excerpt

Introduction

In October of 2007, the Colorado Rockies baseball team made the news for two reasons. First, they won 20 games in the last month of the season to wipe out a six game deficit and make the playoffs. The team became media favorites as announcers told and retold the story of how a franchise with one of the lowest payrolls in the game eventually became World Series champions. Moreover, reporters lauded the fact that success came not through the actions of one or two superstars, but by working together. This second reason for the media's attention was the Rockies players' decision to award a full playoff share to the family of Mike Coolbaugh.

Mike Coolbaugh was a minor league coach in the Rockies organization whose tragic and untimely death occurred on July 22, 2007 when he was struck by a foul ball during a Tulsa Drillers baseball game. At the time, he was working as a first base coach for the Drillers: a Double-A affiliate of the Colorado Rockies. The value of the playoff share eventually grew to $233,505.18 and earned the team a 'Sportsman of the Year Award' nomination from Sports Illustrated (38).

The purpose of this paper is to explore and explain the historical dynamics of the Major League Baseball's (MLB's) playoff bonus distribution system. That high performing teams' members would be willing to sacrifice some of their own potential earnings to support their organizations' staff members is, on the face of it, contrary to the 'self-interests explanations' (SIE; 14) commonly used in management, economic, and sociology theories' literatures. Instead, it is more akin to a transformational leadership style commensurate with higher levels of organizational identification (30).

A Grounded Theory approach is used and a three-phase of the research methodology outlined by Schollhammer (43)--a relationship between share distribution and outcomes were hypothesized, an assessment of available data in the historic record was conducted, and the outcomes were evaluated based on current theories--are described. Both working managers and academic researchers can use the approach used herein to study the organizational phenomenon that commonly arise in Sport.

New Contribution

The paper makes two contributions managers can use to study and improve their organization's performance. First, we present the MLB system as a case for exploring alternative frameworks for financial incentive structures. In particular, the roles of players' decisions, rather than managers' contributions (44), in influencing organizational success. Second, we analyze historic data, testing hypotheses developed using the grounded theory approach, to assess how patterns in share distribution practices are related to organizational performance outcomes.

For management researchers, MLB has offered a fertile empirical test bed. With the availability of data sets sometimes spanning over 100 years, baseball provides a natural experiment through which organizational behavior can be studied. In this case, we analyze the bonus system framework that can be explored in relationship to other more widely used approaches using controlled experimental designs that rely on the availability of data (44). Once completed, such research can provide decision-makers the ability to engage in a strategic process of setting appropriate performance indicators similar to those used in the "Moneyball" approach to player selection (49).

The background presented here follows an inductive/deductive processes used to study phenomenon where event timing is a critical element in the outcomes of interest. First, a brief description of the analytic strategy is given. Second, the historical context of MLB's playoff bonus system is described. Next, data drawn from the MLB's records is analyzed. Third, a theory is generated to explain the bonus system employed in baseball. Finally, we discuss the implications of timing in the development of incentive systems. …

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