While research on counterfactuals has demonstrated that thinking counterfactually (imagining how past events could have been different) improves organizationally relevant outcomes, little is known about the effects of narrating these near-histories, or explicitly communicating counterfactuals, on these outcomes. In this article, I advance a framework for understanding the counterfactual communication-performance relationship. Building on previous work linking counterfactual communication with impression formation, I propose that counterfactual communication influences motivation and subsequent performance through its effects on impression formation. Findings from an experiment demonstrated that individuals who received upward counterfactuals (thoughts of how things could have been better) were more motivated than were those who received downward counterfactuals (thoughts of how things could have been worse), and this motivation led to superior performance. Additionally, receivers' impressions of speakers mediated this relationship.
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