A very fascinating phenomenon has occurred in baseball this year. The best teams in the playoffs this year are also the teams with the biggest budgets. This begs the question of whether high salaries result in better performance on the baseball field. And if so, can that same controversial budgeting advice be applied to the business world? Money management advisors across the nation have recommended cuts in employee salaries as a way to maintain business profits during the recession. However, if the baseball phenomenon is applicable to other industries then this may not actually be the smartest way of managing your money.

It’s been fascinating to see what has happened with baseball this year. Of the eight teams poised to make the playoffs, six of them are ranked among the top eight in terms of the amount of money spent on the team. The Yankees hold the number one position in the playoffs and they also hold the number one spot as the baseball team with the highest payroll. Is this just a coincidence? Many experts in the baseball business say that it is. But perhaps there’s more to it than just pure chance.

It can be argued that higher salaries are an incentive to do better in the sport, and act as incentive for better players to come calling. This could be particularly true during a recession when even the richest people are wondering what is going on with the economy. The money dangling in front of the nation’s best baseball players may be even more of a motivation than it was in the past to do well at the job. And although it could be just a coincidence that six of the top eight baseball teams are also among the top eight spenders, it seems like a pretty big coincidence to just blow off without a second look.

If it’s true that the increase in spending results in better performance for baseball players then business owners may want to look at their own money management approach. Most businesses have taken the budgeting advice that they have to cut back spending (and that means cutting salaries) if they want to keep their businesses alive during financially tough times. However, if better performance correlates with higher profits and higher wages result in better performance than an increase in wages would result in higher profits. No one is saying that you should change how you’re managing your money just yet but it might be worth it to keep an eye on baseball as you watch your own business budget and see what you can learn.