What It Takes to Make Star Hires Pay Off

by Boris Groysberg, Linda-Eling Lee, and Robin Abrahams, MIT Sloan Management Review, Winter 2010.

The authors cite plenty of people and organisations across sectors that have fallen prey to the appealing ‘Legend of the Lone Star’. It turns out no one individual can single-handedly turn around an organisation. How disappointing.

Rather than let stars peter-out, companies can enhance their lustre through considering them part of a constellation. Surrounding star employees with high quality colleagues is one way to get the most out of their talents. By surrounding talented individuals with other stars, an organisation can achieve “a halo effect.” You get more out of top tier performers when you build them up as part of a high calibre team.

Many companies fail to reap the full benefits of their stars because they do not consider the whole system when making decisions such as compensation. This article suggests that highflying stars are often overpaid, a mistake whose consequences may ostracise the individual as well as demoralise existing employees by implicitly devaluing their efforts.

Of course money matters to star performers, but leaders need to think about compensation in the context of the whole organisation. For leaders who wish to build a winning team, this article recommends not pinning hope on one tantalising hire.

To access the article, see: sloanreview.mit.edu/the-magazine/articles/2010/winter

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