Winning the Human Resources Game of Chance
by Philip Cook
Jim is president of a mid-size equipment manufacturing firm. One year ago, after a 10-month search that cost the company nearly $70,000 in recruiting fees and relocation expenses, Jim was thrilled to hire Sam for a key plant manager position.
While Sam seems to have the education, manufacturing experience and technical skills to do the job, he alienates customers, peers and staff to the point that no one will work with him. Jim estimates that one of Sam's tirades cost the company $350,000 in lost business, and today Jim will terminate Sam's employment.
Most companies hire people for their technical competence and when they fire them, it is usually for lack of performance or behavioral incompetence. Michael Watkins reports in his book, The First 90 Days, "Numerous studies have found that 50 to 60 percent of senior executives, hired from outside the company, fail to achieve desired results in the first 12 months and 30 to 40 percent will leave the job or the company within the first 20 months." And results are not much better for supervisors, professionals and even administrative and skilled employees.
For many companies, there seems to be a major disconnect between what is measured or not measured in the hiring process and what is important for success in the job. Many hiring managers are still making selection decisions based solely on their intuition, gut feelings and pet theories. So why does this still happen?
The first problem is that hiring managers do not understand all of the critical competencies required for success in the job. They are comfortable dealing with the job tasks, educational and experience requirements, and technical and functional skills found in a job description, if there is a job description. But most employees quit or are terminated because they do not perform or cannot adapt (behavioral competencies) to the values and expectations of the culture. Hiring managers cannot make good hiring decisions until they clearly understand and can describe what they are looking for and know how to evaluate it in a candidate.
A second problem is that many hiring managers do not have good interviewing skills. Consider:
- Often, the interviewer talks more than the candidate and when the candidate is talking, the interviewer is not listening. A good rule of thumb is that the candidate should talk no less than 80% of the time.
- Interviewers make decisions based on their first impressions. A SHRM (Society for Human Resource Management) study, reported in USA Today, found that "63 percent of all hiring decisions are made during the first 4.3 minutes of an interview." The remainder of the interview is spent confirming the interviewer's first impression.
- Inexperienced interviewers tend to ask leading and hypothetical questions. A sharp candidate can pick up on the answer the interviewer wants from a leading question. When interviewers ask a hypothetical question (tell me how you would handle ...), they are not testing how well the candidate will perform in the job, they are testing how well the candidate can answer a hypothetical question.
- Interviewers take all of their life experiences, biases and stereotypes into an unstructured interview. Consequently, why should we be surprised when two interviewers have polar opposite interpretations of a candidate's strengths or weaknesses or whether the candidate is a good or poor fit for the job?
Often interviews are thrown together at the last minute with no forethought given to the selection structure or process. After a recent gauntlet interview (candidate interviews one-on-one with many interviewers throughout the course of a day or several days), the last interviewer of the day commented "This candidate's energy level was very low for our fast-paced environment." Really, or could it be that he was tired or maybe an introvert? During a second unstructured, gauntlet interview, the candidate was inadvertently asked the same question by every interviewer. The last interviewer thought the candidate's answer really nailed the question, or maybe he learned the right answer from the interviews that came earlier in the day.
Beating the Odds
In spite of the fact the employment interview is the most widely used selection tool, recent research has confirmed the traditional, unstructured interview has only a 15 to 25 percent chance of accurately predicting job performance. However, using a structured, behavioral interviewing process based on job-specific analysis of essential competencies for the position can increase accuracy to 60 to 70 percent. If we couple a structured interview with selection assessments, the accuracy rate can go much higher.
So, what is a structured, behavioral interview? The interview process is planned, focused, content-specific and corrects for many problems by forcing the candidate to focus on very specific, detailed examples about how actual work situations were handled in previous jobs. Also, an experienced interviewer will probe to get even more detailed answers from the candidate and will then record exactly what the candidate said rather than trying to interpret the candidate's personality or traits. Later, the interviewer will compare the candidate's responses to anchors that define competencies that are desired in the job. The premise of a behavioral interview is that "past actions are predictive of future actions."
So how does this all work?
Step #1 -- Identify the "stars" working in the position to be filled: These individuals set the standard for how the job is to be done and against which potential candidates will be measured in the future.
Step #2 -- Conduct a job analysis: Identify the knowledge, skills, experience and competencies required to perform the job. To ensure the job analysis is accurate, involve the "stars."
Step #3 -- Define the critical competencies: Determine the array of competencies to be measured and develop the structured interview and the assessment instruments.
Step #4 -- Validate the assessment tools: Administer the assessments to the "stars" to determine the accuracy of the assessment tool. Develop the behavioral interview questions and interview probes.
Step #5 -- Assess the candidates: Use the validated selection assessments to determine if the candidate has the personality traits and behavioral competencies demanded in the position.
Step #6 -- Interview the candidate: Use a structured, behaviorally based interview to assess the candidate's skill, knowledge, experience, education and behavioral competency fit for the position.
Step #7 -- Evaluate the assessments and interview results and make the selection decision.
So, does this selection process require an excessive amount of time to develop? Initially it takes more time to develop the assessments, train the hiring team on behavioral interviewing technology, and develop the structured interview. However, once developed, the assessments and structured interview can be reused for future openings in this position, unless the position profile changes.
Is this assessment process very expensive? With today's technology and online capabilities, the ROI on selection assessments and structured interviews is very favorable, especially when compared to the cost of turnover.
In an old W.C. Fields movie, there is a famous saloon scene where after watching the comedian survey his poker hand, a man asks, "Is this a game of chance?" Fields replies, "Not the way I play it." So the moral of this story is, "Stack the deck in your favor and don't leave selection decisions to chance." Don't let poor performers ace your selection process.
Philip Cook is founder and president of InterVision Solutions Inc., an organizational development, executive and leadership coaching and human resource consulting firm based in Greenville. He is a member of SHRM and the International Coaching Federation. Prior to starting his consulting firm, he was vice president of human resources for a major division of a Fortune 500 company. Cook is certified through Action Insights Inc. to teach and develop behaviorally based interview technology. He can be reached at intervisionpcs@aol.com or 864-360-3071.
Employee turnover is a costly proposition for employers of all sizes.
Turnover -- Cost as Percent of Annual Salary
Entry Level --hourly, non skilled 30 - 50%
Service/production workers -- hourly 40 - 70%
Skilled hourly (e.g., machinist) 75 - 100%
Clerical/administrative (e.g., scheduler) 50 - 80%
Professional (e.g., sales, nurse, accountant) 75 - 125%
Technical (e.g., computer technician) 100 - 150%
Engineers (e.g., industrial engineer) 200 - 300%
Specialist (e.g., computer software designer) 200 - 400%
Supervisors/team leaders 100 - 150%
Middle managers 125 - 200%
Senior Executive 250 - infinity
Source: The Jack Phillips Center for Research, a Division of Franklin Covey.
