A Crazy Way To Test Candidates

You think you have it bad when hiring. Imagine if:

  • All of your entry level job candidates were known to your entire industry and customers.
  • You and all of your competitors had access to exactly the same background, pre-employment, and past performance data, outside of your one chance to interview this person.
  • Oh, and at least one of the pre-employment tests that are given doesn’t correlate with the performance of your most critical employees.
  • The cost of acquiring the labor is huge and the compensation levels are fixed.
  • If you make a mistake, it takes a year to correct.
  • It may be 3 years before you know if you made a good hire.
  • The order of when you and your competitors can make a job offer is pre-determined, though for a high price you can jump the line.
  • And this all takes place on national television in front of your customers.

Welcome to the drafting of professional sports players in the United States. And this time of the year, the focus is on the National Football League (NFL).

I bring this up because the NFL brings nearly all of the prospective players to a group workout called a combine, which leads to the drafting of players in April. In the combine, the players are prodded and poked by medical staffs, given psychological tests, and are put through a variety of physical skill exercises. Teams also have a chance to interview players individually. The combine is organized so that the teams can see what the roughly 300 players can do without flying them all over the country. For players’ perspectives on this and the drafting process, click here and here.

 

The oddest thing about the combine is that they take single measurements of core skills (speed, jumping ability, etc) when they have access to recordings of every single play in which the player has participated (real performance). Granted, different players go against different levels of competition, but you would think that about 1000 samples of a person’s performance would be a bit of a better indicator than how fast he covers 40 yards (usually a touch under 5 seconds, even for the big guys). The interviews can be all over the map with clubs asking about drinking behavior (the players are college students) and the ability to breakdown plays. And then many players get picked by teams that don’t interview them at all.

From a validation point of view, the performance data on players are actually readily available now. Much like call centers, the NFL records some very detailed individual statistics and not just team wins and losses to evaluate players. Whether the number of times a defensive lineman can bench press 225 lbs correlates with tackles for loss is not known (or at least published), but you get the idea.

Much is made about the pressure that the players are under to perform well at the combine. This is probably more so for those from smaller schools or with whom the teams are less familiar. But, the pressure is also really on the talent scouts (sports’ version of recruiters). They only get to pick 7 players in the draft. Undrafted players can be signed by any team and history shows that they have a surprisingly high success rate (see below).

Because of the amount of data available on players, the draft process is reasonably efficient, if you use the metrics of percentage of players who are in the starting lineup on rosters by draft position, turnover (which is mostly involuntary, and achieving high performance (measured by being voted onto the all-start team), higher drafter players do better than lower drafted ones. Of course, the higher a player is taken in the draft, the more he’s paid for the first part of his career, so there is some financial bias to start higher drafted players. Interestingly, undrafted players perform at the same level on these metrics as third round picks. Perhaps there’s something to having a chip on your shoulder.

What we can learn from the NFL is that when there’s a lot of data available, you can make better selection decisions, even when your competitors have the same data. Second, there’s still plenty of good (though not the best) talent available that’s overlooked by the masses. Finding that inefficiency in the selection process and addressing it can lead to a significant competitive advantage. A good validation process can help you do that.

For more thoughts and insights regarding pre-employment test validation, contact Warren Bobrow.

Curious About Openness

One of my favorite personality scales to administer is Openness to New Experiences. It is one of the “Big 5” personality constructs and is supported by a great deal of research. People who score high on this scale seek new experiences and to engage in self-examination. They draw connections between seemingly unconnected ideas. People who score low are more comfortable with things that they find familiar.

I bring this up this week because I have heard from a few clients who want to hire people who are “curious.” Also, I came across this interview where the CEO was talking about looking for curious people. Note that he’s dead wrong in thinking that Openness is not related to intelligence. Why is it that people go out of their way to denigrate cognitive ability testing when it is THE most accurate predictor for most jobs? OK, that’s for another post on another day.

Part of this trend may come from gaming. Being successful in gaming requires searching in any place available for that clue, weapon, whatever that allows you to get to the next level. It is also a welcoming environment for failure. But, those who show curiosity, problem solving ability (at least learning the logic of the programmer), and the desire to keep learning will be successful.

Measuring curiosity as an outcome is an entirely different story. However, it should include spending time on research, a willingness to fail, and using unique sources of information when developing a solution.

I am intrigued (curious?) about this interest in Openness/Curiosity and I plan to follow-up on it. Is Openness/Curiosity important to your firm or practice? If so, what are you doing to measure it in your candidates?

Filling Diversity Buckets

With great fanfare, Intel announced recently that it is making progress in meeting its diversity goals. I’m not going to pick on their numbers as their current demographics are what they are. There are some good lessons we can learn from how they approached the issue.

  • You have to be holistic. They understand that culture, recruitment, and retention all play a part in attracting, hiring, and keeping diverse talent.
  • Drill down in the data. Intel looks at hiring and retention in different job categories. Saying that you are diverse overall, but not in high paying jobs, is not much of a victory.
  • It takes significant resources to make changes. Developing a pipeline of diverse talent requires money in scholarships, helping schools, etc and finding untapped recruitment pools take time and money.
  • Just like any other business outcome, the goals are reached only if they are measured AND if there are rewards for doing so. Sorry, but you cannot assume that people will strive for noble goals out of the goodness of their hearts.
  • It’s more than hiring numbers. You need to get the compensation and culture right to retain people. Oh, and selecting and developing good managers, as that has a huge influence on turnover.

This article goes into a bit more depth about the challenges Intel are facing. Not surprisingly, there are concerns about balancing multiculturalism (celebrating differences) and integration (making one big happy family). It also points out that if people are spending time on diversity programs, it takes them away from their “real” job (unless they are in the diversity department) and makes it tougher to get promoted and make the higher ranks more diverse.

Just as importantly, this is a case study about what doesn’t work. There is a lot of good science about unconscious bias. However, Intel found that training people about it doesn’t really affect their decisions, or at least as much as tying their compensation to it does.

You can see how Intel treated this as a supply chain as a human resources issue. It’s an interesting approach that probably led to some creative ideas. You’ll note that there is no discussion about lowering standards, which is divisive and bad for the businesses. It is also something that probably is not discussed when they are sourcing equipment. Just something to keep in mind when making important business decisions.

At Least All Employees Get Treated Poorly

For the life of me, I cannot understand why some companies go out of their way to treat their employees poorly. It starts innocuously, like putting employees last in a mission statement. Then it morphs into thinking that people are really machinery (scientific management to the extreme) or a cost center rather than the deliverers of service and product excellence.

Our first example comes from companies that hire low-wage earners. Employers cutting peoples’ hours to avoid paying for benefits is nothing new, but the Affordable Care Act gives them another excuse to do this. And guess what? Many regret it because of the unintended, but obvious, consequences. You cannot say that you want to deliver great value to your customers while at the same time giving your employees lots of reasons to be unengaged. How can you expect people to show up on time and work hard when you keep their hours low (at a poorly paid job) to avoid paying for health insurance (or some other benefit)?

But, it is not just those at the bottom of the economic ladder that get poor treatment. Yahoo, which is getting its clock cleaned by its competitors, implemented a quarterly ranking system of all managers. You may be saying, “But, isn’t frequent performance management a good thing?” Well, yes, it is. But, Yahoo implemented a forced-ranking system on a 1-5 scale.

The forced ranking system where managers have to place people into “buckets”: 10% in “greatly exceeds,” 25% in “exceeds,” 50% in “achieves,” 10% in “occasionally misses,” and 5% in “misses.” To their credit, it’s not quite a bell curve, but the focus is clearly on the distribution of performance and not the performance itself. I consulted for a company that used a similar system and it made almost everyone miserable. You know who hated it the most? Those in the “exceeds” category, because they all thought they were in “greatly exceeds” and resented not getting the benefits (additional training, etc) that went with it. Those in the lowest bucket pretty much knew they were already there.

There’s a long list of companies that have abandoned this type of ranking system (Microsoft being one), yet this type of flogging continues to exist. I get the theory: We need to identify and fire poor performers as they are a drag on our business and we need to identify or best talent and develop them. But why the ham-fisted approach? Good performance management is about defining performance goals with the employees and measuring job output against those standards. Everyone can succeed or everyone can fail, but at least people are judged against their performance and rather than an arbitrary distribution.

Companies have to compete for top talent and a great culture is a great way to attract and retain productive people. Employees want to work in a place where they are engaged. Yahoo is saying, “Come here and be innovative while we constantly compare your performance against others in different jobs.” Not exactly a great pitch. Some restaurants are saying, “We don’t value you enough to pay a competitive wage (unless forced to by law) and we’ll cut your hours to save some additional money. But, please work hard and please our customers while you are here.” Not exactly a great way to deliver great service and keep turnover down.

Whether an HR employee or a consultant, our role is to show leaders the value of employees and the value they bring to a company. We should be fighting efforts that treat people like a cost.

For more information on effective performance management, contact Warren Bobrow.

 

 

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