In this article, an abridged version of one coming up in the Journal of Corporate Recruiting Leadership, I’ll describe how and why hiring and promoting the best people is usually undermined by seven common organizational obstacles.
Briefly, it helps to think of organizations this way: you can hire and promote 100 people whom 20% are high-quality, 20% low-quality, and the rest so-so; or, you can hire and promote 100 people, of whom 90% are top-notch. The first situation is the norm. It’s what you get when obstacles get in your way. The second option is the exception.
It’s what you get when your obstacles are controlled and minimized.
#1 Overemphasizing Past Performance
Past performance is often used as a predictor or even a gateway for hiring or promotion decisions. Of course we all expect a candidate to do well in a past job; but, if the requirements of the new job differ, we have to use an additional set of tools to measure whether the candidate has additional skills. This is almost always the case when hiring someone for a new job; screening college candidates with no prior job experience; promoting individual contributors to management; promoting managers to executives; making job reassignments; and, so forth.
You can trust past performance for skills that transfer, but you’ll need new assessments to evaluate new skills.
#2 Lacking a Common Denominator
Organizations seldom have a reference point for comparing job skills (i.e., requirements) to human skills (i.e., KSAs). Recall the problems associated with a past space shuttle mission when European engineers used the metric system and U.S. engineers used the English system? Organizations must learn how to clearly define for each job the criteria associated with business necessity and job requirements (i.e., how it is to be done). “How” data serves as a bridge to candidate skills. Without a common skills denominator (i.e., a language of how to get from point A to point B) mistakes will be the norm.
It’s bad mojo when job requirements are written in the metric system and candidate skills use the English system.
#3 Focusing on “What” Instead of “How”
Recall the Wizard of Oz. The story is not about the Oz. It’s about how the characters got there. The same is true of performance. If you measure people by performance alone, you encourage using any means to achieve the ends. Results are always affected by being at the right (or wrong) place at the right (or wrong) time. This makes informed decisions a leap of faith. Good hiring and promotion depends on isolating and evaluating each candidate’s individual skills.
Performance is less about “what” was achieved and more about ”how” it was accomplished.
#4 Assuming People are Plastic
We have all seen newly hired and promoted employees turn out bad. We have also seen the difficulty of turning incompetent people into competent ones. It’s not news. People resist any and all personal change but expect others to be flexible. Organizations that try to make someone smarter, change their motivations, make them more sensitive, and so forth, will spend money but get little or no return from their investment. Can someone with a slight amount of job talent, be made better? Maybe. Can someone with no talent be transformed into a fully competent employee? Good luck with that.
If you want to climb trees, it’s easier to hire a squirrel than send a chicken to a workshop.
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Explore the Role of Incentives in Performance Management
#5 Management Interference
Not everyone buys into rigorous selection systems. Many managers tend to think hiring expertise is conveyed upon promotion and strongly argue in favor of gut decisions. I emphasize almost every hiring or promotion decision is gut-based; the only real question is whether your gut is informed or uninformed. Professional hiring or promotion systems feed managers’ guts with objective, trustworthy, and reliable data.
An uninformed gut feeling is indistinguishable from eating bad seafood.
#6 Underestimating Financial Impact
Every below-average employee has a cost. It might be measured in turnover, mistakes, or low productivity. Professionals estimate costs of poor performance to be about 10% of annual payroll for unskilled jobs, 20-30% for semi-skilled jobs, and 40-50% for skilled and managerial jobs. Put another way, an organization with annual payroll as small as $500,000 could be squandering $50,000 to $250,000 per year. Imagine the sales necessary to offset that number! Better yet, imagine the effect on the bottom line by doing a better job hiring and promoting skilled employees.
Hiring and promotion practices won’t get better until they have a dollar value.
#7 Ignoring the Odds
Success in hiring depends more on reducing the odds of making a bad decision than it does increasing the odds of hiring a super star. The future is filled with uncertainties such as family problems, economic factors, and so forth. We can’t ever make perfect predictions. We can, however, make very sure each candidate has the right skills for the job. This is the odds game … focus on making the fewest mistakes, and the successes will take care of themselves.
It’s easier to win more often if you concentrate on making fewer mistakes.