At Least One of a Baker’s Dozen Ways to Measure Quality of Hire

Feb 3, 2011

In a recent ERE article I made the contention that if you wanted to convert a corporate recruiting department into a competitive internal executive search group, you had to first develop the hiring process recruiters would use, before you hired the recruiters. This is primarily attributed to the fact that the external executive search business model and most of the processes they use are fundamentally different than, and often in conflict with, a corporation’s.

With this “ process first” mindset, the solution to this dilemma is to start with a process that maximizes QoH and then find recruiters who are fully capable and motivated to implement this process.

For purposes of this article I’m using this simple definition of Quality of Hire: how well the person performs on the job compared to how the best people perform on the job. Of course, this is a post-hire measure of QoH. The sticky part is measuring QoH pre-hire. The problem I have with current efforts to calculate pre-hire QoH is that they’re indirect: the result of some test, questionnaire, or adding up a bunch of yes/no votes from the interviewing team.

The problem I have with most efforts to calculate pre-hire QoH is that they’re indirect: the result of some test, questionnaire or adding up a bunch of yes/no votes from the interviewing team.

All of this “indirectness” then needs to be correlated with the post-hire metric which often possesses some mix of indirectness as well. That’s why I like the idea of measuring a candidate’s actual performance both pre- and post-hire. On a pre-hire basis this would involve comparing the candidate’s past performance doing similar things related to what needs to be done on the job, and post-hire it would involve measuring what the candidate actually did in comparison to what actually needed to be done.

One factor affecting the success of this approach is the need to make sure the work defined as a comparison pre-hire is the same work the candidate will be doing post-hire. Otherwise the comparison is flawed. Given this pre- and post-hire direct performance measurement requirement, here’s my suggestion for a process that can be used to both measure and maximize quality of hire.

A Process to Maximize and Measure Quality of Hire (QoH)

Define post-hire success before the person is hired. Job descriptions are not only ineffective on this measure, but can also prevent companies from maximizing QoH by excluding high potentials from consideration. To address this weakness, the hiring manager needs to define the 6-8 performance objectives that qualify as job success. These should be spaced out at regular intervals throughout the year so QoH can be measured at the 60-day, six month and one year mark. For example, “during the first 30 days evaluate the procurement process,” or “reduce material procurement costs by 10% during the first year.” I call these outcome-based job descriptions performance profiles.

Use the same scorecard for making the pre- and post-hire comparison. With the performance objectives defined as above, I use an internally developed 10-Factor Talent Scorecard to measure pre-hire Quality of Hire. (Here’s a link to a sample version of this.) While the competencies themselves are fairly standard (e.g., technical, motivation, team, problem-solving, growth), in all cases the rankings are determined by measuring the candidate’s past performance to the real work defined in the performance profile. The new hire’s actual performance is then measured at regular intervals to the same standard, and the two results are compared.

Use a performance-based interviewing process instead of traditional behavioral interviewing to more accurately measure pre-hire QoH. I’m not going to get into why I believe traditional BEI is fundamentally flawed for measuring and maximizing QoH, other than to say it’s too generic, top performers find it superficial, and hiring managers game the system. To overcome this, I modify the typical BEI (behavioral event interview) by getting detailed examples of a candidate’s past major accomplishments for each of the performance objectives listed on the performance profile and look for behaviors within each accomplishment. (Here’s an article summarizing this performance-based interviewing process.) I typically spend 10-15 minutes on each past accomplishment, and then track these over time to observe job consistency and growth. This collective evidence, including other interviewers getting other examples, is then used to complete the pre-hire predicted performance scorecard

There are some obvious advantages with this approach. For one thing, job expectations are clarified up front, which is recognized as the No. 1 driver of on-the-job performance. Second, top performers tend to find the rigor associated with the performance-based interview process more challenging and appropriate than the awkwardness of a traditional BEI. As result, they look at the company as one with higher standards and one where they’d prefer working.

Conduct an interim QoH check at the 60-90 day mark. As part of preparing a performance profile, recruiters need to ask hiring managers what a top person would do during the first 60-90 days that would be indicative of initial success. These interim milestones are often overlooked, but are useful for determining a candidate’s performance early-on. These short-term tasks typically involve the following:

  • Learning something or reviewing a process, report, or analysis and making recommendations
  • Meeting the team, beginning the collaboration process, and establishing relationships
  • Preparing and presenting some type of plan or analysis
  • Passing a training course with flying colors and coaching others

An example of an interim task for a manager might be, “meet all staff members and develop a personal development plan for each person.” For a staff engineer it might be “within the first 60 days assess the design status of the ABC project and lead a formal design review session with marketing and operations.” These types of interim performance objectives can be then be used to measure QoH during the initial 60-90 day time period. Getting a QoH measure early also allows for corrective developmental action to be taken, if necessary.

Conduct a thorough QoH evaluation at the six-month mark, and as part of the annual performance-management process. Since the rankings on the 10-Factor Talent Scorecard are made in comparison to the actual performance requirements of the job, it’s easy to use the same tool for any type of pre- and post-hire evaluation and comparison. Variances between predicted QoH and actual QoH can be then be evaluated from a root cause standpoint. On one side, errors could be attributed to weak interviewing and assessment skills or flaws in implementing the underlying process. More typically, hiring mistakes are attributed to changes in the underlying job, issues with the manager, cultural fit, or some type of related organizational dysfunction (e.g., immature systems, lack of resources).

Successfully measuring, and ultimately maximizing, QoH requires the integration between a company’s performance-management system and its hiring processes. Pulling this off requires the junking of the traditional skills-based job description with some type of pre-hire list of performance objectives. As long as these are roughly comparable to those used to measure the person’s on-the-job performance, the pre- and post-hire comparison is straight-forward. With this type of QoH measurement system in place, all that’s left is to focus on maximizing Quality of Hire, which is the primary purpose of the QoH metric in the first place. The measurement is just a means to this end. Many people working the QoH measurement problem lose sight of this real objective, and waste a lot of time and resources solving the wrong problem. Don’t be one of them.

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