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The Emperor's New Metrics, Part 2
The previous article in this series described how staffing metrics in general óand quality in particular ó are being poorly implemented at many organizations. Today's article expands on the ideas presented earlier by discussing the characteristics of hiring systems that will provide organizations with the ability to consistently make effective hiring decisions. Defining Quality No matter what the context, quality can be a very subjective term that often functions in an "I know it when I see it" kind of way. For the purposes of a scalable, repeatable hiring process that results in measurable outcomes, quality must be much more rigidly defined in order to be useful. This type of rigid definition is difficult to provide when speaking about quality in general, theoretical terms. This is because quality is a relative term that requires a shared understanding of a set of clearly defined outcomes that have some agreed upon value to the organization. While it is easy to talk about these outcomes in general terms, such as "better employees," "good fit," or "hiring top talent," it is often extremely difficult for an organization to provide a precise, working definition of what quality really means. This is problematic, because to provide a meaningful target, "quality" must be defined in a way that can systematically shape the selection process while presenting a set of verifiable outcomes. The definition of quality most relevant to staffing is:
Quality-focused staffing is the outcome of a process that uses a clear understanding of what is required of individuals in terms of both job/role performance and long-term organizational performance to facilitate the systematic identification of applicants with the attitudes, knowledge, skills, abilities, and experience required for helping the organization fulfill its strategic objectives. This process must integrate tools for providing, processing, and predicting in order to create a hiring system that will systematically ensure a congruence between the organization's unique definition of performance and the unique attributes of each individual candidate. These tools and processes must provide information and support that will enable those involved in staffing to systematically make informed, data-based decisions and create a culture that embraces them as essential for making effective hiring decisions. Finally, a quality-focused process must employ closed feedback loops that provide the data needed to facilitate an understanding of the system's effectiveness and the ability to continually refine the system.
A clear understanding of this definition requires a closer look at some of its key elements. As stated in the above definition, a quality focused hiring processes has the following characteristics:
- It must be based on the a clear understanding of what is required for performance. The foundation of quality is a complete understanding of what performance means to an organization in terms of the outcomes required to execute organizational strategy. This requires knowing two key things: 1) what is required for success at a specific job or position (that is, the required traits, knowledge, etc. required to perform a specific job effectively), and 2) what is required for success at all jobs within an organization. Overall, quality must be founded on an understanding of the broad-based attributes that the organization values in its workforce as well as the culture that defines the organization.
- It must provide tools for understanding applicant attributes relative to job and organizational requirements. The quality-focused hiring process requires the use of tools that are designed to measure the congruence between the requirements of the job and organization and the traits and attributes of individuals applying for jobs. Such tools facilitate hiring decisions that are based on the systematic use of data that can be used to predict applicant success.
- It must be systematic and adhere to a standardized process. This does not mean that individuals do not have freedom to make choices within the process; rather, it means that the quality focused process must become a universally accepted process within the organization and must be used in the same manner for all hiring decisions.
- It must serve to aid hiring personnel, not replace them. The quality-focused hiring process requires the creation of a culture that appreciates the value of the data provided by the process and reinforces the idea that the process itself is essential for helping staffing personnel to ensure desired results.
- It must use data and metrics to help promote an understanding of system effectiveness. Without measurement and feedback, there can be no systematic assurance of quality, no matter what the definition. While applying a full blown Six Sigma type program to a hiring process may be unrealistic, the central idea is exactly the same. That is, data is required in order to identify errors in the system and provide ongoing measurement of the impact of changes made in attempt to reduce this error.
At the end of the day, quality is about the ability to make informed, data-based predictions that are as accurate as possible. When it comes to hiring, each of the elements in the above definition plays a critical role in providing organizations with the ability to make accurate decisions. As stated in the definition, measurement is a central component of quality. This is because measurement provides the ability to understand both the accuracy of decisions made during the process as well as their impact on outcomes desired by the organization. Measuring Quality The concept of measurement is an essential part of the quality-focused hiring process. The quality-focused hiring process centers around the ability for organizations to create a system that provides the ability to collect two streams of data and analyze the relationship between them. These include:
- Predictive data regarding applicant suitability relative to job and organizational requirements. This data can come from any part of the hiring process. The only requirements are that it be based on a shared understanding of what is required for success and that the tools used to predict success have been shown to be accurate measures of these same success factors.
- Performance data capturing desired outcomes. This involves the collection of data that is used to define the outcomes desired by the hiring process. Traditionally, this data has included measurement of how well individuals are meeting a specific set of requirements that are used to determine performance for their job or role. It should also include all outcome data that is relevant to the evaluation of the effectiveness of the hiring process, and thus may include any relevant information related to sourcing, screening, or testing. This information is essential because it is the only way that the feedback on the effectiveness of the hiring process can be evaluated.
The actual measures for the first stream of data predict the success of job applicants based on an understanding of job and organizational requirements and the systematic measurement of these things during the selection process. They include:
- Sourcing metrics. This includes any data that can help the organization understand the value added by its sourcing process. These measures can help in understanding the impact of the earliest phases of the hiring process on important outcome measures such as ROI and job performance.
- Basic qualifications. These measures include basic information about high level qualifications such as willingness to relocate, salary requirements, educational background, etc.
- Experience. These are measures that examine what an applicant has done in the past, where they have worked, what experiences they have had, etc.
- Knowledge and skills. These involve knowledge of specific software programs, work systems, machinery, or other bodies of knowledge related to job requirements. These also involve measures of skill in applying these bodies of knowledge.
- Traits, talents, and values. These are assessments of an individual's inherent personality traits that may impact their fit with the job and organization. This category also includes assessments of raw ability, such as cognitive functioning, and assessments of what an individual values in a job or work environment.
- Verification. These measures are designed to ensure the applicant is who they say they are and to ensure that the applicant is not withholding any information about their background that may prove to make them an unsuitable hire.
Actual measures of the second stream of quality data, which relates to the effectiveness of individuals in executing their job tasks and their ability to fit within the framework of the organization, include:
- Sourcing process performance. These provide measures of the effectiveness of the sourcing component of the hiring process. Such measures may include time to hire, cost of hire, effectiveness of recruitment source, and others.
- Objective measures of performance. These include verifiable information related to job performance. Sales data is an excellent example.
- Tenure. This provides an important measure for assessing the effectiveness of the selection system.
- Performance appraisal data. This is data collected from systems designed to capture information on-the-job performance relative to agreed-upon standards.
- Competency-based developmental data. This type of information can be a very useful tool for assessing longer term organizational performance or potential for performance.
- Intangibles. These include things such as commitment, satisfaction, extra role behaviors, belief in company mission, and others.
As you can see, measuring quality in staffing processes is not easy. Staffing processes are not the same as manufacturing (no matter what some may claim). It is possible to predict with extreme accuracy the economic impact of a process to manufacture widgets, but people are not widgets. That said, without data on quality, HR cannot demonstrate the effectiveness of staffing initiatives. To use a very trite phrase: If it was easy, everyone would do it. The point being that if those involved with staffing ever want prove that it is a business-critical function, they must make the effort.