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 Science s (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 http://mansci.journal.informs.org/cgi/reprint/54/7/iv .
The full papers associated with the Insights are available to Management Science subscribers. Individual papers can be purchased at http://institutions.informs.org . Additional issues of Management Insights can be accessed at http://www.informs.org/site/ManSci/index.php?c=11&kat=Management+Insights .
The other Insights in the current issue are:
INFORMS journals are strongly cited in Journal Citation Reports, an industry source. In the JCR subject category "operations research and Management Science ," Management Science ranked in the top 10 along with two other INFORMS journals.
The special MBA issue published by Business Week includes Management Science and two other INFORMS journals in its list of 20 top academic journals that are used to evaluate business school programs. Financial Times includes Management Science and four other INFORMS journals in its list of academic journals used to evaluate MBA programs.
About INFORMS
The Institute for Operations Research and the Management Science s (INFORMS®) is an international scientific society with 10,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, financial engineering, and telecommunications. The INFORMS website is www.informs.org . More information about operations research is at www.scienceofbetter.org .
Management Science