Turnover and Lost Productivity: Links to Weak Hiring Practices

Mar 16, 2004

Question: What are some common symptoms of bad hiring and promotion practices? Answer: Turnover, low productivity, and high training expense. It is really common sense. Suppose you offered competitive jobs, competitive wages, and competitive benefits. Why would an employee who was fully qualified, highly motivated, and well managed under-perform or quit? They wouldn’t, right? Well, then why do employees turn over, under-perform or fail training? Could it be because they don’t have the right skills? Because they’re poorly motivated? Badly managed? This is not rocket science. Poor hiring practices always show up on the job. In fact, most people readily admit their hiring manager had no clear idea whether they could do the job or not when they were hired. Think about that: when pressed, most employees readily admit their hiring manager had no idea whether they could do the job before they were hired! So much for interview accuracy. Diagnosing Performance For a moment, let’s assume the employee’s manager is 1) smarter than a bowl of creamed corn, and 2) does everything he or she can to help the employee excel (yes, I know that’s a stretch, but give me a break here). We just want to look at employee performance. There are three phases to being employed: learning the job, performing the job, and finding satisfaction in the work. Of course, all three phases have some overlap, but let’s tease them apart for purposes of discussion. Learning the Job Learning the job usually makes heavy demands on a person’s cognitive ability. Not only is an employee expected to learn new information, he or she is expected to make job contributions. Information arrives fast and furious. It takes brainpower to process all this information. For example, one client of mine was experiencing a 20% technical training pass rate (even though applicants passed interviews and background checks and graduated from technical training courses). This was a clear sign that mental ability (MA) was not being measured in the hiring phase. When we added an MA test and balanced adverse impact against test scores, pass rates increased to 80%. We could have set the pass-point higher, but 80% met their planning goals and kept the applicant pool open. Don’t Burden Me with Facts Have you ever hired promising salespeople who (after being hired) brushed off the need to learn the product? They don’t seem dull, but these folks just cannot seem to understand that “selling” involves more than talking. I don’t know about you, but I expect a salesperson to help solve my problems, not dump a load of nonsense on my doorstep and leave. This kind of salesperson’s credibility vanishes like beer at a ballpark when prospects fire tough questions. It is a situation where both motivation and mental ability needs evaluation pre-hire. Finally, consider this. A large company that specializes in finding in your yard hidden gas pipes, electrical lines, cable, and so forth, has a 50% technical training failure rate. It costs them about $3,000,000 annually in hard cash. We tracked the problem to mental ability and motivation. The field was clamoring for help, but the VP of HR was immobilized with terror about using anything other than the “tried and true” interview. The problem went unresolved. Any reasonable person might wonder: 1) what kind of company has so much money they can blow $3 million each year? and 2) why was the HR manager not booted? Knowing What to Expect How many organizations talk fast, “sell” the job, and hire candidates before anyone changes his or her mind? What if the candidate does not like the nature of the work? The recruiter might be happy he or she made hiring quota, the hiring manager might check off another item on the to-do list, but the new employee will probably quit as soon as a better offer comes along. It doesn’t take a rocket scientist to predict that people who love their work almost always produce more than people who don’t. Anticipating job dissatisfaction requires showing the candidate a realistic job preview of the job. If a hiring organization says, “We can’t tell them that. They’ll never take the job!” then they had better pay premium wages, because unless they are the only employer in town, unhappy people tend to quit! Doing the Job I am amazed whenever I hear someone tell me their company does not use simulations. “Hmmm,” I think. “Does that mean you have no idea before you hire them whether salespeople can persuade, whether ‘service’ people can provide service, or whether managers can coach?” Applicants for any job with a major interpersonal component need to be evaluated for these. If managers tend to fail because they cannot coach subordinates (and they do, I can assure you), then why don’t organizations put applicants through simulations that evaluate coaching? The same can be said for selling and servicing. Fifteen years of observing managers, salespeople and customer service people participate in simulations has shown me:

  • Managers often destroy subordinate morale because they are either autocratic or “wimpy” (a technical term for refusing to confront a problem).
  • Salespeople consistently blow sales because they won’t take the time to develop trust or ask questions.
  • Customer service people consistently lose customers because they do not empathize with problems and are inconsiderate.

You tell me. What better way can interpersonal behaviors be evaluated if not by watching? Hopefully, your average employee is more intelligent than the philodendron in the foyer. However, if they (the employees) routinely make mistakes, make bad decisions, or hold long conversations with the office foliage, you should seriously consider evaluating mental ability pre-hire. Being smart enough to do the job is still the number one strongest predictor of job performance (up to a point: being too smart is not a good thing either). Leaving the Job: Other Factors Good managers in any organization have a few things in common: they treat subordinates in a friendly manner, clarify goals, give consistent feedback, are positive, develop and support subordinates, are trustworthy, empathize with subordinate feelings, are smart enough for the job, and are good planners. Are managers regularly selected for these criteria? No. They are selected because they were either good producers, held a managerial job at another company, or played a mean game of golf with the top brass (who were also selected using the same “rigorous” criteria). The last major factor affecting employee turnover and performance can be tracked to weak management hiring practices; that is, allowing “Horrible Howie,” poster boy for “The League of Incompetent Managers,” to systematically destroy employee morale. Bad managers are a collective train wreck. Legions of Horrible Howies destroy morale by being deceitful, not backing employees, looking out for themselves, acting inconsistently, treating subordinates like lackeys, or engaging in any number of de-motivating activities that confuse or discourage subordinates. By definition, if an organization relies solely on interviews and unvalidated hiring tools to hire employees, they tend to hire weak employees. Why? Because too many marginally qualified people get through the pre-employment screen. Rest assured, poor performance can only be weeded out in two places: before hiring or on the job. Which do you think is cheaper and more professional?

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