JULY
2001
How
to Hire Right, Instead of Wrong
ORGANIZATIONS
SELDOM SET OUT to pick the wrong person for a job
– but all too often succeed at that task despite themselves.
When
the hoped-for superstar proves to be not so super, or maybe
just a poor fit, much of the benefit of filling the position
has been lost. Last year saw a record number of new CEOs lose
their jobs, as their Boards decided that one misstep was one
too many. At lower, less visible levels the weeding-out process
may take longer. But, sooner or later, mistakes must be corrected,
or they will begin to eat away at organizational effectiveness.
The new
impatience with inadequate performance is nowhere more clearly
expressed than in the shareholder letter of the recently published
GE Annual Report for the year 2000.
After
making the statement, “… we promise that falling
short is not a punishable offense,” the letter nonetheless
proceeds to identify four types of performers at GE: “Type
I: shares our values; makes the numbers – sky’s
the limit! Type II: doesn’t share the values; doesn’t
make the numbers – gone. Type III: shares the values,
misses the numbers – typically, another chance, or two.”
The harshest
criticism is reserved for Type IV, who makes the numbers but
doesn’t share GE’s values. Since these people
can destroy “the culture we need to win,” they
must depart in such a way that “the entire Company [knows]
why they were asked to leave.”
Learning
from Mistakes
One key
to making better personnel decisions is to understand why
some don’t work. The executive search consultants of
Sanford Rose Associates have identified a list of hiring problems
that occur with some frequency in the employment marketplace.
The company or institution that avoids these problems may
be on the road to doing it right.
- The
new hire had inadequate skills. (It was hoped that he/she
would “grow into” the job.)
- The
new hire lacked the right experience. (People can have identical
skills but widely differing on-the-job experience. For example,
Plant Manager A solved labor problems, while Plant Manager
B solved productivity problems. Which kind of experience
do you need?)
- The
new hire was a poor fit. (Her “Lone Ranger”
style quickly wore thin in the company’s team-player
environment. His “Big Picture” approach was
crushed by the company’s preoccupation with detail.)
- The
employer tried to save money on recruiting. (By relying
on Internet job postings and classified ads, the company
found only those who were unhappy or unemployed.)
- The
employer tried to save money on the offer. (It thus guaranteed
that top-tier candidates would turn the offer down.)
- The
employer hired someone it didn’t really like (hoping
to fall in love at a later date).
- The
employer hired someone it liked too much (thus overlooking
serious shortcomings that might have been more evident to
an objective person).
- The
employer failed to ask the tough questions. (“We’ve
worked so hard to fill the position, let’s not queer
the deal by checking references or testing the candidate’s
writing skills.”)
The
Costs of Doing It Wrong
When
an employer fails to do it right the first time, by hiring
either the poor performer or the poor fit, a number of costs
are incurred.
First
is the cost of hiring, which must be repeated. That is far
greater than the fee that may be paid a search consultant.
The cost also includes the “hourly rates” of all
those company executives involved in the screening, interviewing
and decision-making process (the more, of course, the merrier),
the down time and lost productivity diverted from money-making
activities, candidate travel and lodging expenses, hiring
bonuses, wages paid, orientation and training expenses, etc.
All told, they may run 2.5 to three times’ first year’s
salary.
Second
is lost business opportunity. Almost every manager and individual
contributor is hired to do one of two things: make the organization
money, or save the organization money. There is a cost associated
with doing either poorly.
Last
but not least, there is the cost of lost momentum and lowered
expectations. Except for the lowest and most routine replacements,
new people are greeted with some degree of fanfare (the higher
the position, the louder the noise). Big things are expected
to happen and, if they don’t, employee morale plummets
and the ship suddenly seems adrift. It was no fun working
last year at the headquarters of Coca-Cola or Procter &
Gamble after newly minted CEOs lost the confidence of their
Boards and abruptly exited the premises.
Doing
It Right the First Time
Good
ideas are constantly reborn. Whether one grew up in the era
of Zero Defects, Quality Management or Six Sigma, the concept
of doing it right the first time sets the standard that exceptional
organizations follow. There should be no doubt that increasing
the reliability of hiring decisions is just as important to
an organization’s future as is the reliability of product
performance and delivery dates.
Professional
search consultants contribute two important things to the
hiring process: their expertise and their time.
Thanks
to their expertise, they can assist employers in thoroughly
evaluating the requirements of an open position; in identifying
and attracting the hidden candidates who can make a genuine
difference in organizational performance; in assessing the
type of offer that will motivate them to change jobs; and
in providing the kind of hand-holding and moral support that
will lead to acceptance of the offer and resistance of any
counter-offer.
Thanks
to the time they provide, which may include substantial after-hours
interviewing and recruitment, the search consultant is able
to work productively on the employer’s behalf –
liberating hiring managers and HR professionals from countless
wasted hours reviewing Internet submissions, advertising responses
and aging resumes on file. “Watching companies perform
their own searches,” says one consultant, “is
like watching someone look for love in all the wrong places.”
Sanford
Rose Associates, for example, uses a process known as Dimensional
SearchÒ that requires considerable client time up-front
helping identify the specific candidate skill sets, experience
and style that will result in a “perfect fit”
with the real-world requirements of an open position. Time
spent up front is time saved later, while the reliability
of the ultimate hiring decision has been increased.
Just
as advertising agencies build brand awareness, law firms win
lawsuits and public relations firms enhance corporate reputations,
so too do search firms find the right people for jobs.
In that
annual report mentioned earlier, GE’s four top leaders
emphasize the importance of people in achieving the company’s
goals. GE, the letter says, pursues a “rigorous discipline”
of identifying both the top 20 percent and the bottom 10 percent
– the first of which is highly rewarded, while the latter
of which is annually “removed.” Only by raising
the bar each year, the authors conclude, can a “real
meritocracy [be] created and thrive.”
If any
organization hopes to reach a level of continuous quality
improvement, the easiest place to start is with the hiring
process. That’s because excellence in hiring leads directly
to excellence in organizational performance.
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