Dancing with the Stars: The Practical Value of Theory in Managing Star Employees

Abstract

Star employees create disproportionate value for organizations. However, managing stars is decidedly difficult. Scholars have not yet appropriately addressed this practical problem. Much of the problem is interpreting our theoretical models that convey human capital from a static perspective. By combining incomplete contract theory with human capital research and theories of strategy, we show how existing theory can provide a framework for solving problems related to managing stars while also offering a platform for further research within the strategic human capital field. To do this, we recap extant theory and examine how stars create value for an organization by co-developing firm-specific while simultaneously developing general human capital. Second, we provide a practical dynamic value appropriation framework illustrating how the employer and the employee determine who captures the value stars create as they go through the employment life cycle.

The HR ecosystem framework: Examining strategic HRM tensions in knowledge‐intensive organizations with boundary‐crossing professionals

“…In addition to contributing to the development of the HR ecosystem framework, secondly, our findings demonstrate the need to engage with the plurality of collaborative and competing internal and external stakeholder interests shaping strategy development (Kaufman, 2015; Snell & Morris, 2021), rather than assuming a unilateral top‐down perspective (Becker et al, 1997; Schuler & Jackson, 1987). Importantly, our findings show that faculty are key organizational stakeholders who engage in indeterminate exchanges with their employing university (Collings, 2014; Marchington, 2015; Morris et al, 2021). The emphasis placed by the dynamic capabilities literature on employees as resources, which can be reconfigured by organizational leaders to adapt to change, downplays the role played by the dynamic strategies of workers and their agency (Fallon‐Byrne & Harney, 2017; Schilke et al, 2018).…”

“…A crucial point repeatedly raised by the participants was that the distinct knowledge and social capital universities seek to develop and shape among academics to meet organizational objectives in a changing broader environment is often attractive and transferable to other universities within and outside the United Kingdom, sharing broadly similar meso‐level objectives (Morris et al, 2021). Indeed, given that university boundaries are relatively permeable, some of the participants pursued their own career and earnings strategies beyond their immediate employer and undertook additional work for other universities within or outside the United Kingdom (Marchington et al, 2011; Swart & Kinnie, 2014).…”

“…Although the sample had relatively high levels of discretion, it is important to recognize that many were actively seeking more meaningful participation in substantive strategy development. While macro‐level forces including national frameworks and performance rankings significantly influence and constrain organizational strategies, the experiences of academic faculty demonstrate the scope for greater collaborative leadership, where decision‐making is shared more evenly (Heffernan et al, 2016; Marchington, 2015; Morris et al, 2021).…”

Red Giants or Black Holes? The Antecedent Conditions and Multilevel Impacts of Star Performers

“…Recent scholarly work has tried to inject greater nuance by examining the type of knowledge stars possess (Baba, Shichijo, & Sedita, 2009;Subramanian, Lim, & Soh, 2013); the portability of their knowledge (i.e. general or firm-specific) across varying organizational contexts (Groysberg et al, 2008), the basis of their perceived performance ; the impact exerted across the employment life cycle (Morris, Alvarez, & Barney, 2018); and, the role of gender differences in shaping how stars are identified, rewarded, or even promoted (Aguinis, Ji, & Joo, 2018). However, as Table 4 indicates, a majority of studies define stars not based on their essential attributes or characteristics, but rather on the achievements or outcomes the star produces.…”

Paradoxical Resource Trajectories: When Strength Leads to Weakness and Weakness Leads to Strength

“…One of the potential challenges arising from valuable human resources such as star CEOs, executives, or teams credited with success is that they begin to appropriate rents in the form of exorbitant compensation and bonuses, lavish perquisites, and inflated budgets. Star employees also may leave for more pay or engage in auxiliary, distracting activities outside the firm that hurt their performance on the job (Malmendier & Tate, 2009; Morris, Alvarez, & Barney, 2018; Wade, Porac, Pollock, & Graffin, 2008).…”