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Few companies are thinking about hiring right now, but that's a mistake. If history is any guide, staffing will become a front-burner issue once the economic upheaval eases. Even now, companies are running into staffing problems in emerging markets, and many will have to find talented replacements for baby-boom retirees. Will they be able to meet their needs? Not likely, say Fernandez-Araoz of Egon Zehnder and Harvard Business School professors Groysberg and Nohria. Their research, conducted with scores of CEOs, HR executives, and recruiters, found current hiring practices to be haphazard at best and inept at worst. And no wonder. Ignorant of their staffing needs, most companies treat hiring top-level executives as an emergency. That leaves them little choice. One study found that nearly a quarter of the time, the executive selected was the only candidate considered. Far too few companies conduct reference checks; far too many rely on gut reactions when judging qualifications and cultural fit. Hardly anyone considers whether candidates will be good team players. And, shockingly, only half of the top managers recruited by the companies studied were interviewed by anyone in the C-suite. The result: About a third of promising new hires depart within three years of being recruited. As a remedy, the authors offer their best thinking about state-of-the-art hiring practices for the top levels of the organization. Their recommendations cover the entire hiring cycle in seven steps: anticipating the need for new hires, specifying the job, developing a pool of candidates, assessing the candidates, closing the deal, integrating the newcomer, and reviewing hire-process effectiveness. Whatever the future brings, firms that follow these practices successfully will have a distinct advantage over their shortsighted competitors.

A U.S.-based security software company considers its options to expand. Different labor-market and labor-law situations are analyzed for the U.S., U.K., Germany, China, and India.

Barbara Norris struggles to address the many problems facing her as a recently promoted nurse manager in the General Surgery Unit (GSU) at Eastern Massachusetts University Hospital (EMU). She has inherited a unit with the lowest employee satisfaction scores and highest employee turnover rate among all of the departments at EMU. Furthermore, her new unit was infamous for its culture of confrontation, blaming and favoritism. The staff that has remained is dissatisfied, unmotivated and not functioning as a team to deliver patient care. In fact, GSU's patient satisfaction scores, although average, had been declining steadily over the past few years. Barbara has been asked by EMU'S Director of Nursing to turn the unit around in the midst of an economic crisis and deep cost-cutting measures throughout the hospital. Where and how should she begin?

Big Spaceship, a digital marketing agency, faced a rather big challenge: How to scale the distinctive culture that was essential to its competitive strategy? Renowned for the cutting-edge web sites that it developed to market major Hollywood movies and leading consumer brands, the firm had won numerous awards and garnered considerable attention within the advertising industry. In mid-2008, Big Spaceship remained small (it had fewer than 50 employees) but was poised for significant growth. For founder and CEO Michael Lebowitz, the central challenge was to figure out whether and how the agency could retain its boutique culture while transcending its boutique size. The case begins by briefly outlining Lebowitz's background, along with the history of Big Spaceship since its founding in 2000. Then the case shifts to a discussion of external dynamics: the firm's value proposition, which focused on providing start-to-finish, strategy-driven digital marketing solutions; its interaction with clients; and its relationship with established players in the advertising industry. Next, the case examines the firm's internal dynamics. Here, in addition to describing the culture of Big Spaceship, the case puts special emphasis on the firm's recent shift from a functional structure to a team-based structure. Finally, the case provides an overview of key issues that Lebowitz and his team must consider as they plan for the firm's growth--how to raise capital, how to gauge the optimal size for the company, how to manage an expanding staff. A major highlight of the case is the inclusion of more than a dozen graphically compelling exhibits, which help to illustrate the firm's value proposition, its innovation-oriented culture, and its evolving organizational design.

Marcel Lorent, head of International Mobility at Brussels-based Solvay Group, faces decisions on the expatriation status of four of his firm's talented executives. Each decision will impact the candidate's professional and personal life, and will have implications for effective management and growth in Solvay's global markets. The case explores these issues, with a close look at Solvay's attempts to develop talent management and mobility processes that allow the firm to align its strategic needs with the complexities of its individual employees' needs and lives.

Teena Lerner, the CEO of Rx Capital, had a problem. Her three-year-old hedge fund was highly profitable, but in 2004, one of her four equities analysts lost a lot of money for the firm. If Lerner followed her existing compensation system, designed to reward teamwork, he would wind up significantly underpaying her other analysts, all of whom had performed well. Should she follow the compensation system or not? And what should be done about the underperforming analyst?

This is an MIT Sloan Management Review article. Past research is clear on the benefits of high-performing, or "star," workers. Star computer programmers, for example, are more productive than average ones by a ratio of eight to one. But reaping the benefits of such talent is not so simple. Say you hire a number of stars. How can you guarantee that they will be able to replicate their success in a new environment -- in short, how portable are they? In the past, portability has been viewed as an attribute of a person, team or organization, but it can also be looked at as an attribute of a position. Specifically, certain jobs do require different levels of company-specific human capital, thus making some workers less portable than others. Consequently, organizations should not think of talent management as a simple "build versus buy" dichotomy. Rather, there are some positions for which they can buy, and others for which they must build. Within investment banks, for example, the retail brokers (who handle individual clients) work primarily on their own. In contrast, institutional salespeople (who sell to major institutional investors such as Putnam, Vanguard and Fidelity) are more likely to perform their jobs in teams. Thus, retail brokers are more portable and can easily be hired from the outside. Institutional salespeople, however, should be developed from within, and efforts should be made to retain them. Understanding such differences is crucial for companies attempting to attain sustainable competitive advantages that derive from human capital. The authors' research, which has probed the application of human capital theory to talent portability, should help companies recognize that an entire class of factors -- specific roles within an organization -- greatly determines the portability of performance. With that knowledge, executives can gain a deeper understanding of the pros and cons of hiring certain star employees.

Ron Guntz, commander of recruiting for Israel's Special Forces, had been instructed by his superiors to evaluate the process by which he selected solders for its 20-month long training program. Was the Army conducting this process in an ideal manner? The case examines the Special Forces training in light of the types of missions soldiers are expected to execute and asks students to consider whether the Special Forces recruitment and training process identifies the best possible candidates for future Special Forces service.

This case, set in 2008, examines how Google has worked to avoid potential negative byproducts of rapid growth such as bureaucracy, slow decision-making, lack of visibility, and organizational inconsistency. When the case protagonist, Kim Scott, started with Google in 2004, she wondered if she would still be there in several years as she liked small, entrepreneurial companies. In 2008, she was pleased that Google still had the same entrepreneurial energy that it had when she joined. She and her colleagues reflect on how Google has been able to maintain its culture as the company keeps doubling in size.

The law firm, Sloan & Harrison, was confronting issues pertaining to morale and turnover among its associate ranks. Annual surveys of associates revealed increasing dissatisfaction, particularly with respect to partner communication, work-life balance, and mentorship. The firm's leadership wondered: how legitimate were the associate concerns? What could and should be done to resolve them?

The law firm, Sloan & Harrison, was dealing with some discontent among its junior non-equity partners. These partners were concerned with the transparency of the advancement process, their ability to position themselves as both leaders within the firm and rainmakers, and the politics of promotion within the firm. The firm must find solutions to these challenges. Senior partners wondered: Was the path to partnership structured in the best interests of the firm? What could and should be done to address the non-equity partners' concerns? What were the ultimate effects of discontent within the NEP ranks upon the firm's functioning overall?

Motivating employees begins with recognizing that to do their best work, people must be in an environment that meets their basic emotional drives to acquire, bond, comprehend, and defend. So say Nohria and Groysberg, of Harvard Business School, and Lee, of the Center for Research on Corporate Performance. Using the results of surveys they conducted with employees at a wide range of Fortune 500 and other companies, they developed a model for how to increase workplace motivation dramatically. The authors identify the organizational levers that companies and frontline managers have at their disposal as they try to meet workers' deep needs. Reward systems that truly value good performance fulfill the drive to acquire. The drive to bond is best met by a culture that promotes collaboration and openness. Jobs that are designed to be meaningful and challenging meet the need to comprehend. Processes for performance management and resource allocation that are fair, trustworthy, and transparent address the drive to defend. Equipped with real-world company examples, the authors articulate how to apply these levers in productive ways. That application should not be selective, they argue, because a holistic approach gets you more than a piecemeal one. By using all four levers simultaneously, and thereby tackling all four drives, organizations can improve motivation levels by leaps and bounds. For example, a company that falls in the 50th percentile on employee motivation improves only to the 56th by boosting performance on one drive, but way up to the 88th percentile by doing better on all four drives. That's a powerful gain in competitive advantage that any business would relish.

This note provides guidelines to consider and reviews the sources available for compensation research. Having an understanding of the "outside option", that is effectively the average salary being offered for a position in a specific type of firm is an important component of conducting analysis for compensation decisions. The information in this note will help in locating the information necessary for this type of analysis.

In May 2004, with the war for talent in high gear, Groysberg and colleagues from Harvard Business School wrote in these pages about the risks of hiring star performers away from competitors. After studying the fortunes of more than 1,000 star stock analysts, they found that when a star switched companies, not only did his performance plunge, so did the effectiveness of the group he joined and the market value of his new company. But further analysis of the data reveals that it's not that simple. In fact, one group of analysts reliably maintained star rankings even after changing employers: women. Unlike their male counterparts, female stars who switched firms performed just as well, in the aggregate, as those who stayed put. The 189 star women in the sample (18% of the star analysts studied) achieved a higher rank after switching firms than the men did. Why the discrepancy? First, says the author, the best female analysts appear to have built their franchises on portable, external relationships with clients and the companies they covered, rather than on relationships rooted within their firms. By contrast, male analysts built up greater firm- and team-specific human capital by investing more in the internal networks and unique capabilities and resources of their own companies. Second, women took greater care when assessing a prospective new employer. In this article, Groysberg explores the reasons behind the star women's portable performance.

Jim Rogers, CEO of the energy company Cinergy, has led the company from the brink of bankruptcy to one of the premier energy companies through selecting a focused strategy, aligning the organization to support it, and mobilizing all the employees to implementation. The case also discusses the strategies used by Rogers to communicate the strategy, which included innovative image maps.

Don Jenkins, a star event planner at a large firm, resigns to take a position at a boutique firm. However, Don may have made some mistakes when departing that could be trouble later on down the road. The case can be used to teach the business and legal aspects of employee departures and explore turnover dynamics in professional service organizations.

In 1995, Institutional Investor magazine began selling a complete ranking of the best equity research analysts. This report allowed research firms to assess the relative quality of each analyst across the industry, and this enabled firms to know nearly as much about the quality of analysts at other firms as they knew about the quality of their own analysts. Ponders the impact that increased transparency of performance will have on the labor market for equity research analysts, and asks how the directors of three different research firms ought to respond given each firm's competitive situation.

Describes the development and implementation of one of the world's most advanced human resource management support systems. The Royal Bank of Scotland Group is a global banking leader that began implementing a strategy for measuring the impact of human capital on bottom-line financial metrics in 2000. Spearheaded by HR executive Greig Aitken, this strategy included the use of an online toolkit of software through which HR executives could measure employee performance, gauge its impact on business performance, and commission new unit-specific surveys and studies. Aitken faces several challenges in advancing the use of human capital strategy throughout the Group: namely, how should he further build buy-in among key Group executives? And how should the Group respond when human capital analysis reveals some startling results in one of its most important divisions?

Describes the process by which the largest law firm in the world developed a unique framework for personnel management. In 2004, John Conroy is about to take the reins as the leader of Baker & McKenzie, the largest law firm in the world by employees, with offices in 38 different countries. Facing an intensifying war for talent and associate retention concerns in some offices, Conroy has spearheaded the development of a framework for guiding the hiring, development, and retention of employees. As he is getting ready to introduce his framework at the firm's annual meeting, however, he faces many questions about its implementation. Could a single framework effectively apply to lawyers across so many different regions and cultures? Had this framework properly identified the attributes needed to succeed at Baker & McKenzie? How would the firm's hundreds of partners react? Offers the industry- and firm-specific content necessary for students to explore these questions and more.