Well, the annual NCAA men’s basketball tournament is history and once again American productivity took a significant hit.

According to a March 14, 2007 article in theLos Angeles Times, a Chicago consulting firm did the math and figured out that the people who watch the NCAA men’s basketball tournament on their computer at work will cost the nation’s employers $1.2 billion in productivity. And that does not count for those who watch on conventional television, spend time over the water cooler comparing their brackets, or the sales types who take a long lunch to check out the action at the local sports bar.

“We here at CBS want to apologize for slowing down the American economy for two days every year, but that is the price you pay for March Madness,” Sean McManus, president of CBS News and Sports said with a laugh.

It is also apparent that there will be an increased level of events that will utilize video-streaming, thus competing for employees time and attention on their workplace computers. As the cost of bandwidth space comes down and capacity for advertising increases, video-streaming will proliferate.

Streaming into your office soon…
Mark-Hans Richter, marketing director for tournament sponsor Pontiac, recently told adweek.com: The writing has been on the wall for awhile. While TV is the dominant medium for live events, when you have a passionate event…that passion finds itself in many places.”

Challenger, Church and Gray, the aforementioned consulting firm, in a light-hearted look at the impact of March Madness on the workplace, used data from various sources and determined there are 79 million office workers with access to the Internet and 22.9 million of them are basketball fans. Based on a national average weekly salary of $671 and an average viewing time of 13-1/2 minutes (last year’s average) they came up with the $1.2 billion figure of lost productivity.

Realistically though, John Challenger points out the figure can be misleading because the line between work and personal life is blurred. “People work after hours, they work at home, on vacations and during their commute,” Challenger said. (Whew…I’m starting to feel a bit less guilty about the time I spent watching the games!)

Much of this is bad news for those employers who expect a day’s work for a day’s pay (imagine that!), and, of course, there will always be the boss looking over employees’ shoulders.

But not everyone takes the negative view of this. Brooke Phautz knows that sales of his mortgage banking business will plunge during the NCAA basketball tournament, but he showed the games on the office big-screen TVs and awarded a prize to the employee who correctly picked the winning team.

“I want to have a good, fun, upbeat atmosphere,” he said from his Hunt Valley, MD office. “You spend more of your waking hours at work, so you might as well enjoy it.”

Bring on bigger bandwidth
His attitude may be catching on. Recognizing the hours workers are toiling and trying to attract the best producers, many employers are becoming more tolerant of employees who use work time for personal tasks, according to another recent article in theLos Angeles Times.

Some employers use office pools for events such as March Madness and the Super Bowl as morale boosters, rather than leaving it to individual employees to handle.

Increasingly, bosses say they look the other way as employees peruse Nordstrom.com or book concert tickets as long as their work gets done and the computer system is not threatened. Some companies make their office equipment, including computers, available for workers to use for personal tasks during their breaks. One public relations firm in Southern CA allows employees to write their personal blogs during office hours, convinced it can lead to new clients.

These and other employers say that work time lost to Web surfing, e-mail and phone calls is a small price to pay for stronger morale, less turnover and higher productivity.

Companies are becoming more flexible and tolerant “because you are not going to attract and keep talent if you manage with an iron fist,” said Brandi Britton, senior vice president of OfficeTeam, a Menlo Park, CA, staffing company.

Loosening the iron fist
More employers recognize that trying to stop workers from personal tasks during office hours is almost futile and possibly counter-productive. Angela Gennaro, HR director for Merit Co., a property management firm, said, “We don’t think it would be realistic to try and enforce a strict policy against personal use of the company’s computers. It is apparent that people need to get a few things done while they are at work.”

Many employees say the trade-off works for them, too. “More and more people are saying, without apology, that if you are going to be reaching me at 8 p.m., then if I need to get something done at 1 p.m., I’m going to do it,” said Peter Rose, a partner in marketing research firm Yankelovich Inc. in Los Angeles.

According to a Yankelovich survey last year, 30 percent of Americans say they use the Internet at work to take care of personal business. But with employees fudging, “the number is probably higher,” says Rose.

Jean Washington, a legal secretary in Los Angeles, says she makes doctors appointments, and e-mails friends and relatives from work when she has a few minutes, and she is certain “her attorney bosses do, too.”

Limits to tolerance
But employers also say there are limits to their tolerance. Kevin Bress, a partner is a Hunt Valley law firm that makes the basketball tournament a fun, morale-boosting event, recently installed software to block Web shopping on their system because he concluded it “had gotten out of control.”

And Mr. Phautz estimates that some of his employees spend a quarter of their time during football season playing fantasy football. While he concedes they are paid 100 percent commission so it affects them directly, he also feels if they spent more time originating mortgages “they’d be a lot better off.”

As it is with many things, it appears the personal use of technology in the workplace can be both a blessing and a curse and it is all about striking a balance.

As for me…I’ll leave the last words to Dave Johnson, my editor, “You and 75 percent of working males in America waste away the first two days of March Madness. It’s a tradition.” And to Karen, “Are you going to get any work done today?”