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Performance-Based Hiring
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How does it feel when you are confronted with a salesperson you’ve hired who doesn’t understand the product or service he or she is selling?
When I asked 37 recruiters last week, this was part of their response:
This is the same thing candidates say about recruiters when the recruiter doesn’t know the real job. A recruiter who doesn’t understand the real job he’s trying to fill comes across as weak, timid, ineffective, and untrustworthy to both candidates and clients alike.
So if you want to be a paper-pusher or transactional recruiter, you don’t need to understand real job needs. However, if you want to be a top recruiter, or just be in the top half, your understanding of real job needs is just as important as a good salesperson’s need to understand the product line he’s selling.
When I was a young recruiter, about 25 years ago, it was very clear to me that the primary reason my good candidates got rejected was the lack of understanding of real job needs on the part of the hiring manager and everyone on the hiring team. I also knew that I had little influence with candidates or the members of the interviewing team unless I really understood the actual requirements of the job. Solving this problem was how performance profiles and the Performance-based Hiring process came into being.
A performance profile is a summary of the five to six key performance objectives of the position, not the qualifications the person needs to have. For a plant manager, it might be to implement a process improvement program increasing capacity by 25% during the first year. For a person in a call center, it might amount to showing up every day (100% attendance) and processing 30 orders per day.
The key to preparing performance profiles is to get the hiring manager to focus on what the person needs to do to be successful, not on what the person must have in terms of skills and qualifications.
Start preparing a performance profile by asking these questions of your hiring manager client on your next assignment:
Once you get this list, ask the manager to put the tasks in priority order. Then ask, “If I could present a person to you who could do all of these things, but didn’t have the exact qualifications as listed on the job descriptions, would you be open to at least see the person?” You’ll likely get a yes. What you’ve done is shifted the hiring decision away from qualifications to real job performance. You’ve also completed the first step in implementing the Performance-based Hiring business process for hiring top performers.
Getting the hiring manager and everyone on the hiring team to agree to real job needs is a critical first step, but it’s only the first step in hiring top people. By shifting the decision to performance, you’ve given each interviewer something tangible to evaluate.
Without this, most interviewers use their gut, intuition, or emotional biases to make important hiring decisions. These are the primary causes of bad hiring decisions. Preparing a performance profile also gives the recruiter the insight needed to better understand real job needs. This will be critical when sourcing and contacting top performers.
The second step in the Performance-based Hiring system is a process called talent-centric sourcing. The concept behind this is that top people don’t look for new opportunities nor decide to take one job over another using the same criteria as average performers. When looking for a better job, top people are initially more interested in the company, the culture, and the types of job opportunities available in their area of expertise. Rarely are they looking for a specific job, with a specific title. So, if your primary sourcing strategy is to drive candidates to a boring online job description, you’re missing out on the best people.
If you want to see more top people, you need to offer them options to engage with your company other than formally applying. This might mean making it easy to talk to a recruiter or having an “exploratory” conversation with a hiring manager. A talent hub is a good interim step. These micro sites allow top people to just look and gather information about a company and class of job before committing. Sourcing top people is comparable to selling a custom product to a discriminating buyer where there’s plenty of competition. Posting a boring, hard-to-find job, coupled with a disrespectful application process, is not going to help.
The third step in the Performance-based Hiring process is the use of an evidence-based interviewing process. As a recruiter, I learned that the best type of interviewing question was to ask candidates to give detailed descriptions of their major accomplishments. I then would examine the trend line of these accomplishments over time to see if the person was still growing, or at least working at a high level of performance. I also used this type of interview to find gaps in the person’s background in comparison to the real job needs.
As long as I could demonstrate that the job I was trying to fill was at least 15% bigger than the person’s current job or other opportunities, I rarely had to compete on compensation. Of course, without knowing the performance profile, it was not possible to clearly define this gap.
The fourth step in Performance-based Hiring is the effective use of recruiting, negotiating, and closing techniques to increase the rate of offers being accepted on fair terms, to minimize the chance of a competitive offer being accepted, and to prevent counter-offers. The set-up for pulling this off starts with the preparation of the performance profile and the performance-based interview described above. If the interview is conducted properly and the 15% gap is clearly defined, the candidate is almost ready to accept your offer.
Now is the time for the hiring manager to get more involved in the recruiting process. As long as the compensation package is competitive, top people accept offers based on the challenge of the job (the 15% gap), the long-term growth opportunity, and their relationship with the hiring manager and the rest of the hiring team.
Top people want to work for leaders and mentors. They want to work with other top performers. To establish this type of strong relationship, the hiring manager needs to meet at least twice with the candidate during the interviewing process, personally make the offer at lunch or dinner, and then contact the candidate at least twice after the offer is extended.
During these sessions, the hiring manager has to demonstrate sincere interest in the candidate, describe the challenges involved in the job, and provide examples of other people the manager has helped to grow. Developing a similar relationship with someone else on the team (a peer) helps as well. All of this will be invaluable as the candidate compares other offers and turns in her resignation.
As a recruiter, your role is to facilitate all of this and ensure that it happens. You want the candidate to see your new opportunity as less risky and more challenging than all of the other opportunities available or accepting a counter-offer.
You’ll never have enough money in your budget to hire all of the top people you would like. So start the recruiting process under the assumption that you’re going to have to convince the person that your job is worth taking, even if the compensation is modest or lateral.
This means you’ll need to sell on the challenge, the growth opportunity, the hiring manager, and team. A process like Performance-based Hiring can help you pull this off, but unless you know the real job, you’ll never get the chance.