Here's Why Hiring A Star Performer Lifts Up An Entire Organization

Star performers are up to eight times more productive than their humdrum peers - and that's not even the biggest advantage they bring to an organization.

New research suggests that these "stars" boost the productivity of entire teams by attracting uber-talented new recruits.

The NBER working paper by University of Toronto researcher Ajay Agrawal and his colleagues John McHale and Alexander Oettl comes to this conclusion after analyzing 255 evolutionary biology departments between 1980 and 2008. They compared the before-and-after productivity stats of departments that landed star performers with departments that didn't.

"On average, department-level output increases by 54% after the arrival of a star," the authors write. But it's not the star's output that makes the most significant difference. "After removing the direct contribution of the star," they continue, "department level output still increases by 48%."

That jump in department-level quality doesn't level off after the star's arrival - even after eight years.

Interestingly, Agrawal's team finds that much of the increase in productivity comes from the star's ability to attract talent. The quality of people joining these departments - as determined by a number of journal citations - jumped by a tremendous 68% after a star arrived.

The social effects of recruiting a star have lasting benefits for an organization. When you hire a star, you effectively hire their network. Additionally, they provide credibility and cachet to the organization, which excites other top performers.

We can see the pattern of talent attracting talent in fields far removed from evolutionary biology. Take the case of basketball: In July of 2010, LeBron James decided that he'd jump to the Miami Heat, due in no small part to the recruitment efforts of Dwyane Wade. Just days later, Chris Bosh left the Toronto Raptors for the Heat - and Miami soon won two championships.

For an example in the business realm, recall that Steve Jobs prided himself on a being an exceptional recruiter. He saw it as a necessity, since he believed that the contributions of stars in areas like hardware design far outweighed those of less-gifted people. As Jobs told a reporter, it was a secret of his success:

I've built a lot of my success off finding these truly gifted people and not settling for B and C players, but really going for the A players…I found that when you get enough A players together, when you go through the incredible work to find five of these A players, they really like working with each other. Because they've never had a chance to do that before. And they don't want to work with B and C players and so it becomes self-policing and they only want to hire more A players. And so you build up these pockets of A players, and it propagates.

Of course, as Agarwal and company freely admit, the paper only concerns university departments, which the researchers say is "a rather special local knowledge economy." But the principle revealed there - that talent attracts talent and thus raises the productivity of a group - is valuable to anyone interested in growing an organization.