What Can A-Rod Teach Us About HR?

Using that time-honored rhetorical tool--baseball analogies--Daniel Indiviglio over at our corporate cousin The Atlantic has some interesting thoughts about compensation in the financial sphere. No direct relation to government--but these are the types of issues which we often find ourselves running into.

Indiviglio responded to Felix Salmon and Jeffrey Pfeffer, who both assert that from a purely cost-benefit standpoint, it's not worth it for employers to use high salaries to lure talent from their competitors. Using finance as an example, Pfeffer, quoting a Harvard Business School study, claims that nearly half of the time, productivity plunges when the hire gets to the new job.

Indiviglio is skeptical of this claim, but basically agrees that often, if you're an employer, it's better to develop your own superstar talent, rather than try to hire someone else's. With homegrown talent, you know what you're getting. But if you still want to try to poach your competitor's stars, then it's better to have a structured incentive program rather than a fixed bonus, Indiviglio argues. Otherwise, your superstar might feel entitled to the job and not work so hard. (For Yankees fans out there, he uses this principle to explain why superstars like Alex Rodriguez should be paid per hit, not on a yearly salary.)

Government human resource planning may not be perfect, but the feds have invested a lot of time and effort into nurturing long-term talent. And at the same time, a lot of time and effort has been spent trying to make the system more nimble and rewarding in the hopes of nabbing private sector talent. Indiviglio's post is a reminder that these issues can be equally baffling to private organizations like banks (and baseball teams).