Are You Managing and Keeping Your Star Performers?

Topic(s): engagement, job performance, Rewards, turnover
Publication: Personnel Psychology
Article: Star Performers in Twenty-First Century Organizations
Authors: Herman Aguinis & Ernest O’Boyle Jr.
Reviewed by: Karan Samtani

Every organization wants to retain its best people, because star performers are essential to success. But this maxim has become even more prevalent in today’s business world.

The authors claim that the 20th century was about reforming the business world into factories that valued conformity and having everyone do their tasks in the same way. But the current business climate has people working to solve more problems in more unique ways. The projects that we work on involve quick turn-arounds and efficiency.

In short, the business world has moved away from the conformity of the 20th century and into the creativity of the 21st century. This change has made star performers even more valuable, according to the authors of the study.

THE VALUE OF STAR PERFORMERS

According to the researchers, the top 10% of a company’s employees account for close to 30% of overall performance, and the top 20% account for close to 50% of overall performance.

The study found that replacing a star with an even slightly inferior employee can result in dramatically lower output. The value of star performers are not only based on their performance, but how they act and react with other employees.

 

WHY STAR PERFORMERS OFTEN GROW DISGRUNTLED

The problem is that many organizations act as if the average employee is performing the majority of the work, and continue to use the normal distribution method when it comes to how they handle employees.

What can we do that has the greatest effect on the most people? They use this methodology for training, for determining strategic change initiatives, and for compensation.

The result is that they placate average employees and tend to alienate the star performer. Star performers feel as though they are either being talked down to, not given any attention at all, or are not valuable to the company. When that happens, they leave.

 

HOW COMPANIES CAN KEEP THEIR BEST PEOPLE

Management would be better served by focusing on their best people instead of focusing on the majority. The result is a more efficient increase in output, and fewer alienated star performers. A star performer in this job market still has options, and they take them when the work environment is not suitable for them.

So how can organizations keep their star performers?

  • Allow star performers the flexibility to move in and out of teams to take full advantage of their knowledge transfer to rising stars.
  • Use training interventions that improve star performers even marginally, because a slight increase in performance of stars can lead to greater production than a more significant increase of the average employee.
  • Create a compensation system that conforms to the distribution of performance, which will help retain stars.
  • Compensation systems that best retain stars provide considerably higher pay for elites.
  • Investing more time into stars is likely to gain greater overall output and create positive gains.
  • Management practices of limited flexibility and homogeneity of pay are not likely to motivate star performers.