Hiring away star performers from competitors? Don't bother, says study

July 29, 2008

Managers seeking to hire star employees away from competitors are likely to be disappointed with their costly new employee's performance – and the star is likely to be unhappy, too – according to the Management Insights feature in the current issue of Management Science, the flagship journal of the Institute for Operations Research and the Management Sciences (INFORMS®).

Management Insights, a regular feature of the journal, is a digest of important research in business, management, operations research, and Management Science. It appears in every issue of the monthly journal.

"Can They Take It With Them? The Portability of Star Knowledge Workers' Performance" is by Boris Groysberg and Linda-Eling Lee of Harvard Business School and Ashish Nanda of Harvard Law School.

In their study, the authors ask two major research questions: Does switching firms have an effect on the short-term and long-term performance of stars? And is hiring a star a value-enhancing or value-destroying activity for a firm?

From an empirical analysis of star analysts over a period of nine years (1988?), they find that hiring stars is advantageous neither to stars themselves, in terms of their performance, nor to hiring companies in terms of their market value.

The performance of a talented worker depends in part on firm-specific human capital embedded in colleague relationships and firm capabilities. The issue of whether workers' performance is portable across firms is relevant for firms that seek to build a sustainable competitive advantage on star talent. The authors find that stars are imperfectly mobile resources that can represent a potential source of sustained competitive advantage for firms.

The findings suggest that managers hiring stars and the stars themselves should be wary of performance declines following moves to a new firm.

The current issue of Management Insights is available at mansci.journal.informs.org/cgi/reprint/54/7/iv .

Source: Institute for Operations Research and the Management Sciences

Explore further: Researchers pioneer alternate use for sugarcane waste

Related Stories

Researchers pioneer alternate use for sugarcane waste

November 25, 2016

From Britain to Mexico, countries are considering sugar taxes to reduce consumption and curb the global obesity epidemic. In 2014, about 600 million people, roughly double the population of the United States, were obese. ...

Six virtual reality experiences that don't cost too much

November 18, 2016

Virtual reality, what's up with that? If you are curious about this highly buzzed high-tech form of entertainment but don't feel like plunking down $1,000 or more on sophisticated hardware, just visit one of a slew of amusement-park-type ...

Mixed report for global health progress

September 21, 2016

The world has made progress in curbing infant mortality, stunted growth and other poverty-driven problems, while obesity, alcohol abuse and partner violence has risen, a major review of UN health goals said Wednesday.

Recommended for you

Fossils of early tetrapods unearthed in Scotland

December 7, 2016

(Phys.org)—A team of researchers working at a dig site in Scotland has found tetrapod fossils dated to approximately 15 million years after the Devonian mass extinction—a time period experts in the field have referred ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.