"Hiring a star resembles an organ transplant," observed the head of research at a distinguished Wall Street investment bank. "First, the new body can reject the prized organ that operated so well inside another body...On some occasions, the new organ hurts healthy parts of the body by demanding a disproportionate blood supply...Other parts of the body start to resent it, ache and...demand attention...or threaten to stop working. You should think very carefully before you do [a transplant] to a healthy body. You could get lucky, but success is rare."
Most managers realize that hiring a star is likely to damage the morale of incumbents, but they tend to underestimate the magnitude of the upheaval and aftershocks.
Compensation is typically the first bone of contention. It rarely takes long for the particulars of the newcomer's deal to make the rounds.
If senior management lavishes dramatically higher pay and more desirable resources on a newly hired star than on a company stalwart who has performed equally well, both the stalwart and other employees are likely to become more or less instantly demoralized.
Companies eager to please stars also award them other coveted resources, like support staff as part of the hiring package. Loyal employees can quickly become embittered : without comparable resources, they cannot possibly perform as well as the hired gun.
A perception of unfairness and inconsistency may spread quickly. People typically use individuals similar to themselves as points of comparison when assessing whether their rewards match their contributions and whether they are being treated fairly. If they conclude that they are underpaid and undervalued, they are apt to waste time complaining or infighting or to retaliate passively by expending less effort and withdrawing commitment. Indignant incumbents may refuse to cooperate with a resented newcomer. They may even actively seek to leave.
This is an extract from Chasing the Stars by Boris Groysberg, an associate professor of organizational behaviour at Harvard Business School.