Working with star employees offers a range of benefits, but new research from Cornell University also highlights some of the risks associated with such collaborations.
The study shows that star performers tend to get an over-sized share of the credit whenever projects go well, but also receive more than their fair share of the blame when things go wrong.
“We look at what happens when you collaborate with a star in terms of whose getting credit when that collaboration is successful,” the researchers say. “What we find, and this is consistent with research on the Matthew effect and other work, is that if you collaborate with a star and that collaboration is successful, the star does get more of that credit and you benefit less than if you were working with somebody that wasn’t a star. The silver lining here though is that if you collaborate with a star and that collaboration is not successful, the star takes the heat.”
Working with stars
The researchers examined the hedge fund industry in the US to test how working with a star would affect the appraisal of non-star performers both when projects went well and when they went badly.
They were also keen to understand how the personal status of the non-star affected the perceptions of the star co-manager when they succeeded or failed together.
The researchers gathered data from Eurekahedge, which is an investment research firm that compiles data on both hedge funds and fund managers. This data was augmented with that from Institutional Investor, which publishes a league table of both hedge funds and fund managers. In total, the data included 59,337 non-star performers who were managing 28,304 funds between 2005 and 2019.
Spreading the credit
The results suggest that working with a star reduces both the credit non-stars get for successes and also the gains in professional status that accrue from the success. Similarly, however, it also buffers people from the fallout from failures, in terms of both blame and loss of status.
“Another layer to the findings was that it turns out that employees that have their own record of success are the ones that benefit the most by working with stars,” the researchers say. “The ones that need the benefit of working with the star the least actually benefit the most. Our thinking there is that to the extent that you have proven yourself as an employee, even if you’re not a star, then others are less likely to brush you off when they look at your collaboration with a star.”
Interestingly, the results also reveal that non-stars who have not managed to achieve a degree of success on their own seem to fare far worse than their peers who have something of a track record behind them.
“They may be seen as riding the coattail of the stars,” the researchers conclude. “While low-performing employees might not get a status bump when they succeed with a star, if they’re at least in a situation where they’re learning from the star’s expertise, then that’s going to help their performance outside the collaboration, which can eventually put them in a better position down the line.
“I think what this points to, both for low-performing employees and for managers,” they continue, “is the importance of being very mindful of what is the gain that you’re hoping to achieve from a collaboration with a star.”
