How to treat your star employees after they get bad news

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It's become a truism of modern management that it's far more important to focus on your stars than to worry about bringing your under-performers up to par. And so, many workplaces do just that, publicly recognizing their good work, promoting those who consistently turn out stellar results and, of course, showering top performers with extra cash.

As a result, many managers would be forgiven for thinking their best workers might be more insulated from a setback or two. But new research published in the current issue of the Academy of Management journal shows that when career stumbles occur, such as being passed over for a promotion or receiving a less prestigious assignment, the performance of "high status" people actually suffers much more than that of those at the bottom.

"There's this belief that high-status individuals have all these advantages others don't," says Jennifer Marr, an assistant professor at Georgia Tech's business school. "There's this idea that they're more resilient. But what we found is that because they've made this a really central part of who they are, it's more devastating when they lose it."

The research, by Marr and Stefan Thau, now a professor at INSEAD, turned to an unusual source of data for their study: Major League Baseball. In addition to lab experiments, they looked at how the performance of baseball's stars versus its also-rans fared after losing out in salary arbitrations between 1974 and 2011. Marr and Thau examined what's called "final-offer arbitrations," in which both players and teams submit a salary number, and an arbitrator decides between the two. There can be no compromise between the two numbers.

This yields a definite winner and loser, giving the researchers a public and clear way to look at players who actually lost "status." In addition, baseball's many statistics allowed them to examine how each player's performance fared in the season that followed. While Marr acknowledges some deficiencies in the data — for instance, the cream of the crop probably doesn't enter arbitration nearly as often — baseball stats also provide a rare real-word context for academic research.

The research showed that those players who came into the arbitration with marks of distinction (those who had been named to All-Star teams and received major awards by third parties such as the Golden Glove) and lost their salary fight had a much bigger hit to their next season's performance than low-status players or those who got the salary they wanted.

"I was surprised in the baseball study that it had such significant effects," Marr says. "I thought maybe they'd feel devastated but they'd build up their strength and go out and do their best. That's the narrative we're used to."

Marr and Thau drew an obvious conclusion, both from the baseball study and two other lab experiments that simulated what happened when high-status folks are brought down a notch. Stars' identities are more wrapped up in their status and, therefore, they are more distracted and under greater pressure when hit with bad news about their careers.

This highlights a downside leaders must recognize and try to manage when it comes to their best workers. Great performers may be a huge asset to any organization, but they "may also come to depend on the respect they receive to maintain a positive view of themselves," the authors write.

The fear, of course, is that once those one-time stars suffer the initial blow and their performance takes a downward turn, the setback could prompt a vicious cycle that never allows them to recover. And because of our shower-the-star culture, most organizations have invested way too much time and money in these folks to see their potential go to waste. 

So what to do? Marr says the data suggest that managers give top performers extra assurances when they're passed over or faced with other professional hits. Getting co-workers in on the act — those whose opinion really matters when it comes to career stumble — should also help. "The individual feels like others in the group have lost respect," Marr says. "To the extent it's possible for coworkers to support each other, that's a good thing."

And while it's admittedly unrealistic, Marr says another way managers might address the issue is to not put quite so much emphasis on status and stand-outs in the first place. "It's because of all of these rewards [that stars] receive that they make their position such an important part of who they are," Marr says. "If the hierarchies were a little more egalitarian, would the consequences be so big? Probably not."

Read also:

What's a great boss worth?

Study finds that basically every single person hates performance reviews

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Jena McGregor writes a daily column analyzing leadership in the news for the Washington Post’s On Leadership section.
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