The Prima Donna Effect

Once again, combing through the dusty halls of my desktop PC’s hard drive, I have come up with another saved gem.

I believe I cut and pasted this from a post on a yahoo finance message board for a stock I was following.  It might have even been my own company’s stock.  I don’t recall who posted it though.  Not that it matters (to me) anyway.  I think the main source for the story is attributed.  I particularly like the last line.

Prima Donna Effect

There’s a story of the prima donna effect, which I borrow freely from the book “The Arithmetic of Life” by George Shaffner.  An accounting group recently hired an employee named “the Whiz” because he is believed to be twice as productive as any one of the other accountants.

But once hired, he constantly complains to his peers about the direction of the company, the performance of management, and the insufficiency of his compensation. To management, he complains about the direction of the company, the performance of his peers, and the insufficiency of his compensation.

Over time, three of the younger accountants began to emulate the Whiz. Others became disenchanted with the Whiz and his entourage and the office became polarized. People talked, morale sank, and productivity fell.

At the request of the managing partner, an analyst was brought in to look at the problem. Over the course of a number of auditing engagements, the analyst found that the Whiz really was twice as productive as the company average. But, because of divisiveness, sinking morale, and rumor mongering, the productivity of everyone else in the firm, including the three young accountants, had dropped by 5-15% each.

The analyst concluded that although the Whiz was worth two man years by himself, the rest of the company would lose a total of 2.4 man years (24 employees times an average productivity loss of 10% each). Thus, the Whiz’s net contribution to the firm would be negative in aggregate of -0.4%

Upon receiving the results of the analyst, the managing partner fired the Whiz, put the three young accountants on probation, and charged the analyst with finding a suitable replacement for the Whiz.

The analyst hired an average accountant named Cal. Being mediocre, Cal had no ego but he was a good listener, a good follower, a diligent worker, and a reliable volunteer. Whenever he was assigned to an engagement, the overall productivity of the team improved.

The analyst later determined that the overall performance of the company had been restored to its previous level, and that because of Cal’s team attitude, it had increased another 5%. Thus, Cal’s net contribution to the company was the equivalent of 2.2 man-years. (Cal’s one year plus 24 times 0.05) compared to a negative 0.4 for his predecessor, a net gain of 2.6 man years.

The managing partner then gave Cal a raise.

Moral of the story, from my perspective at least, – human interactions are nonlinear and poorly understood by management.

P.S. It is well known that 90% of engineers consider themselves to be above average.