Leaderboards have been a staple of gaming and gamification for as long as both have existed. From Space Invaders, to baseball, to your gamified CRM system – all have had leaderboards in there somewhere.
The reasoning goes “if you are the top, you feel special and if you are at the bottom, you don’t want to be there so are motivated to improve”.
It sounds great, doesn’t it? Instant engagement. DO well, feel special. Do badly, be motivated to do better. In some cases, this is can be the case. In sports, it is a way of knowing where a team is in the league and how many points they need to improve by. In space invaders it was a way to create a more social or even personal challenge in the game, helping to create that “one more go” feeling. If I have one more go, I know I can be better than AAA or myself.