The Find: Poaching star performers from rivals is unlikely to yield the hoped-for results.- The Source: Management Insights from the July issue of the journal Management Science.
The Takeaway: The researchers analyzed the performance of star analysts over a period of nine years to try and find out what effect switching firms had on their ability to generate value. Though it might be tempting for a manager to invest in luring high performers away from the firms that made them famous, the paper concludes this is a risky impulse — the analysis proved that switching companies was harmful to both the star performers themselves and their new companies, both of whom tended to be disappointed with the results.
If a singer can sing, she can presumably do so on any stage, so why doesn’t the same hold true for analysts? The researchers conclude: “the performance of a talented worker depends in part on firm-specific human capital embedded in colleague relationships and firm capabilities.”
Or to put that into every day English: context matters as much as talent. Relationships and incentives usually contribute to making an employee a star, rather than simply raw ability. Lose the context and you’ll lose some of the performance.
What’s the takeaway? The authors don’t mince words: “managers hiring stars and the stars themselves should be wary of performance declines following a move to a new firm.”
The Question: Have you had success or disappointment when you’ve hired star performers?
(Image of rock star by JasonRogers, CC 2.0)
