Measuring and Maximizing Quality of Hire

Measuring quality of hire (QoH) is somewhat elusive, but critical if a company wants to know if its sourcing, recruiting, assessment, and hiring programs are working properly. Without it, implementing a raising-the-talent-bar strategy become problematic. In this article I’d like to focus on some core issues involving QoH, and offer an idea on how to measure it both pre- and post-hire.

Let’s get started by first defining Quality of Hire (QoH). In an ERE article last year, I proposed this as a basic definition: how well a new person meets the performance needs of the job using the following 1-5 yardstick:

Level 1.0: Underperforms on all core performance requirements of the job.

Level 2.0: Reasonable match on most job needs, but needs extra management, direction, or coaching to meet the basic performance standards.

Level 2.5: Average performance. Meets basic requirements of the job with a normal degree of management coaching and direction.

Level 3.0: Solid performance. Meets significant performance requirements of the job on a consistent basis with minimal management direction and support.

Level 4.0: Consistently exceeds significant performance requirements of the job on measures of quality and/or quantity.

Level 5.0: Far exceeds significant performance requirements of the job on a consistent basis.

While typical interview and assessment tools can differentiate between above and below average performance, they don’t do too well in determining if someone is a Level 3, 4 or 5. Traditional job descriptions are part of the problem, not the solution, since they emphasize skills rather than performance. Generic competency models are similarly flawed, since they don’t adjust for the actual job requirements nor any unusual circumstances involved. Behavioral interviewing works to some degree by adding structure to the interview and reducing emotional bias, but is not specific enough in measuring variations in good performance. While these tools are adequate for separating the good from the bad, they’re far less effective for measuring QoH.

To more precisely measure pre-hire QoH, understand what drives performance and what causes underperformance. Assuming the person hired was appropriate on all traditional measures, a determination then needs to be made as to whether the person was hired for the right job, for the right manager, for the right company, and under the right circumstances. This type of multi-step approach offers a model for developing the means to measure pre-hire QoH. Here’s how:

Good person hired or not. First determine if the person hired was a generically solid performer in past roles doing similar work. For our purposes let’s define a Level 3 performer as someone who is in the top third or the top quartile of their peer group. These are people who get assigned bigger projects, get promoted faster, get bigger reviews, and receive formal recognition for a job well-done.
Good job fit or not. A good person put in the wrong job is a big cause of underperformance, yet in most companies this assessment is not as robust as it should be. To measure pre-hire QoH on a job fit basis requires an assessment of past performance to some predefined future performance. Consider the Gallup Q12 as a guide for this. The Q12 identifies 12 factors that drive performance and satisfaction. Most of them relate to job fit, e.g., clarifying expectations up front; providing appropriate tools, resources, and materials; assigning people work they are highly motivated to perform; and providing appropriate training. Most companies blunderbuss their way through the job fit part of the assessment by over-relying on generic competency models, poorly constructed assessments, and an over-emphasis on skills. None of these help measure pre-hire QoH more precisely. A direct assessment of job fit, including the ability and motivation to perform the work at peak levels is an important subset of the pre-hire QoH measurement.
Good managerial fit or not. A good person doing the right job for the wrong manager is a primary cause of dissatisfaction and under-performance. Bad managers demotivate their teams, and the best ones inspire them. One way to measure managerial fit as part of pre-hire QoH is to compare the new hire’s developmental and managerial needs to how the hiring manager trains, develops, and manages his/her team. This is a variation of Blanchard and Hersey’s work on situational leadership.
Right company/situation or not. Given a good person, appropriate job, and the right manager, a mismatch at the company cultural or circumstance level could still undermine performance. During the assessment some measure needs to be made regarding these environmental issues, including pace, intensity, level of sophistication, complexity, how decisions are made, resource availability, and company politics. While most companies recognize the importance of this, the actual assessment is relatively superficial.

Considering this multi-step concept, here’s an approach for measuring and maximizing quality of hire:

During the intake meeting, prepare a performance profile clarifying the performance expectations for the job.
Look for the achiever pattern during an extended work-history review. This is comparable to gathering forensic evidence that the person is in the top half of the top half, doing work similar to that described in the performance profile.
Conduct a “performance review” approach to interviewing, rather than a traditional behavioral interview. Here’s how: during the interview spend 10-15 minutes digging into the best example you can find of the candidate doing something similar for each of the performance objectives listed in the performance profile (here’s an interview guide for this). Then “grade” the person the same way you’d conduct a performance review using the 1-5 scale noted above.
Examine the trend of performance over time and compare this to top performers in your company. The idea is that the steeper the slope of the line the stronger the person.
Assess managerial fit. One way to do this is to compare how controlling vs. hands-off the hiring manager is to how much direction and support the candidate has received in the past.
Measure cultural and situational fit by understanding the circumstances associated with the candidate’s best work. The idea here is to determine if there are any situational issues that affect performance.
Measure team skills by examining the functional makeup of and types of teams the person has led and has been assigned to.
Combine all of the separate scores for the 10 factors into an overall pre-hire quality of hire measure using the talent scorecard.

One problem companies have in measuring pre-hire quality of hire is the continued reliance on old tools. The metaphor that to a person with only a hammer every problem looks like a nail, rings true in this situation. To measure pre-hire QoH more precisely requires a different way of thinking and different measuring sticks. The multi-step approach is a simple way to rethink the problem in combination with a pre-hire performance review type of interview. Using a quality of hire scorecard like this is a reasonable approach to assess all of the variables that best predict on-the-job performance and those that contribute to underperformance. As long as the scorecard is based on real job needs and circumstances, the same evaluation process can then be conducted post-hire. The causes of differences in predicted vs. actual job performance can then be identified and used for process improvement.

Implementing a talent acquisition strategy requires some type of QoH metric to monitor effectiveness and provide immediate feedback. After the fact is too late to do anything much about it, since you won’t know if it’s working or not. The approach suggested here offers a commonsense roadmap to begin. From what I’ve seen, getting started is often the most difficult part of the journey.