Even in Business, No Good Deed Goes Unpunished

We are in an era where many businesses feel that they must project an image of social responsibility. This may be driven by management’s true desire to be a force of good, a competitive advantage, or as a way to attract millennial job candidates. Being perceived as being on the “wrong” side of an issue can have significant effects on consumer oriented businesses (see Chick-fil-A or Facebook). But is the impact of this corporate behavior?

There many consequences of a firm demonstrating social responsibility. These include:

1. Being socially conscious doesn’t really help sales. This is probably because just about every company promotes social responsibility in some way, so there is not much variance.

2. Companies that promote how socially conscious they are get more job applicants, particularly women. This makes sense since millennials are drawn to companies that share their values.

3. Those who apply for work at companies that promote socially responsibility are more productive than those who apply at companies who do not advertise that they are socially responsible.

4. Those who work for work for socially conscious companies are more likely to steal from them.

Wait—what’s that with #4? People who are generally more willing to work for a socially conscious company are more dishonest (steal, slack off, etc.) than other employees? Not quite, but when people do good things they sometimes feel as if that gives them a license to get away with stuff. Keep that in mind next time a leader of an organization that thinks it has a high value to society (religion, journalism, etc.) gets caught engaging in some pretty awful behavior.

So, if you are a company that wants to promote social responsibility to attract more productive workers, but you don’t want the bad stuff that comes with it, what should you do?

1) Reduce the amount of social responsibility messages after people have been hired. Once people are onboard, you don’t need to keep talking about how much good the company does—they get it. The continued presence of these messages makes moral licensing more prevalent.

2) I would assume that there are individual differences when it comes to moral licensing (most likely related to conscientiousness). And it so happens that conscientiousness is one of the personality variables that generally predicts job performance. So, it would be valuable for socially conscious companies not to take it for granted that their candidates are all good people. Rather, a validated test would likely help them select those who are less likely to look for an excuse to slack off.

Many business choices have unintended consequences. Being overtly socially conscious apparently does as well. However, companies can mitigate those consequences with some good planning and employee selection practices.

Can Tech, Workers, and Burgers Co-Exist?

One purpose of technology is to make labor more efficient. This was not news to the inventor of the first wheel or the latest and fastest micro-chip. Western society has been pretty comfortable with this because it really makes things go faster and has eliminated some very physically demanding jobs. Of course, tech also creates higher paying jobs (though not as many) than the ones that get replaced. But, where do customers draw the line?

This article describes the effect that tech is having on McDonalds. Note that this is the only description of the issue I’ve seen online, so I’m a bit skeptical of the premise that this is the reason people are quitting work at McDonalds at higher rates than before, especially considering the low unemployment rate. There are those who think that this kind of automation is being driven (or at least accelerated) by local minimum wage increases. However, automation has always been designed to reduce labor, so that’s not a big surprise.

Yet, Walmart is appearing to be having the opposite experience with tech in its stores. I think the big difference is that the impact of the technology there is to allow employees to focus on what they already do well rather than leading to a change in necessary skill sets.

New tech always has growing pains and I am sure that fast-food chains will get this figured out pretty quickly. The bigger questions to me are:

1) Whether they will understand that they have changed the cognitive complexity of the jobs, and therefore need to change their hiring practices.

2) If service is really part of the equation for fast food customers.

When you change tech in any job, you need to change organizational behavior to adapt. Part of this equation is training, but the other half is ensuring that your selection systems are still valid. This change has led to an increase in behaviors such as quickly shifting between ways people can order while maintaining attention to detail. This requires a somewhat different skill set than handling one order at a time using one process. The tech won’t work as well if you do not have the people who can run it correctly.

As for the second question, the U.S. economy is filled with examples of service employees going away. Whether it was the transition away from pumping your own gas to checking out your own groceries, we are pretty good at serving ourselves. This leads me to believe that the increasingly automated fast food restaurant will be here more quickly than you think.

Should Employers Embrace the Push for GEDs?

The U.S. has a lot of people who do not get a high school diploma. This can lead to significant barriers in employment and future opportunities in college. As a result, in 2013, over 500,000 people took and passed a high school equivalency exam (GED). This was a 20% increase over 2012. The Bureau of Labor Statistics accepts a diploma and GED as being the same. But, should employers?

The idea behind the GED is that some people are unable to complete high school for a variety of reasons and by passing the test they show that they have acquired the same amount of knowledge. That may be true, but there is little high school knowledge, except perhaps some math, that employers find valuable. What is valuable is the skill of being able to navigate something for 4 years. But, you don’t have to take my word for it. This report outlines in detail that the career and economic trajectories for those with a GED more closely resemble high school dropouts without a GED than those who complete high school. From a public policy perspective, this leads me to believe that that the proponents of the test are selling snake oil.

Employers should strongly consider this in their applications. Why? Because there may be economic consequences of treating a GED and a high school diploma the same way. In working with a client to validate ways to help them reduce turnover, we looked at the retention rates by education level for entry level positions. What we found was that after 12 months, the retention rate of those with a high school diploma compared to those with a GED 80% vs 65%. After 24 months the retention rates were 68% vs 50%. At a hiring rate of about 1000 per year and a cost of hire a bit more than $5k per person, these are significant differences. After checking with some colleagues, these results are not unusual.

The overall picture shows that employers should not be treating those with GEDs like those with high school diplomas. Rather, you should validate the impact of education level against turnover or performance as evaluate it accordingly in your application, biodata, or training and experience scoring process.

What Do Grades Tell Us When Hiring?

Welcome to 2018! This first link actually highlights a look at valid personality testing on a largely read website. This makes me think that the year is off to a good start in the field.

Along those same lines of predicting behavior, a line of thought has always been that school grades are indicative of future success. The logic behind this makes sense. If a student applies him/herself and does well in school, then it is likely that he or she will do the same at work. Critics will say that grades measure something very specific that does not really translate to work and there are biases in how grades are given (which is why universities use standardized tests).

As always, what makes a good predictor really depends on the outcomes you are looking for. If your goal is to hire people who are good at following rules and doing lots of things pretty well, then this article suggests that school grades should be part of your evaluation process. But, if you want to hire very creative and novel thinkers, then GPA probably is not your best answer.

What also grabbed me about the article was the definition of success. The research article cited indicated that those who did very well in high school, nearly all of them were doing well in work and leading good lives. But, for the authors, this apparently is not enough. Why? Because none of them have “impressed the world,” whatever that means. And because there are lots of millionaires with relatively low GPAs (here is a suggestion: how about controlling for parents’ wealth before making that calculation?).

From an employment perspective, we need to be clear what valuable performance looks like when validating and part of the selection process. If your goal is to select people into positions that require developing unique solutions, then GPA may not be a useful predictor. However, if you expect people to follow processes and execute procedures, then GPA is likely to be a useful tool which should be used with other valid predictors.

And, if you are looking to hire people who are going to “impress the world,” good luck to you.

Eliminating Subtle Age Bias

Since age bias is something that could affect nearly all HR professionals, I am surprised that it does not get more attention. But, with the average age of employees in the U.S. going up (see here) and companies likely to recruit more older workers due to the unemployment rate being near recent lows, we are likely to see more attention paid to it, particularly in the technology field.

As with most bias, it can be introduced in a subtle way. For example, the term “digital native” describes those born roughly after 1990 that have had current technology (internet, smart phones, etc) pretty much their whole lives. A quick Indeed.com search shows many jobs where “digital native” is part of the description. Put another way, those older than 35ish should think twice before applying. Similarly, there is a whole literature (this article is an example) on how gender loaded terms in job postings affect who will respond to them.

Now, I get that you are advertising for tech jobs you are looking for employees who are completely comfortable in a digital environment and communicating with others who are. But, those are behaviors that can be assessed for with valid pre-employment tests without having to make assumptions about a person’s age.

And that is really the point about implicit bias—we make assumptions about groups without understanding people as individuals. We face a challenge in employee selection of creating processes that treat everyone fairly, but at the same time learn about them as individuals. It is a challenging needle to thread, but one that our businesses depend on us to do well. Using a combination of unbiased language and valid pre-employment tools can help us get there.

Or, if you would rather beat them than join them, you can open an art gallery that only focuses on artists ages 60 and older.

Putting Tech Diversity Puzzle Pieces Together

I am going to write about an issue with political ramifications while doing my best not to be political, so please accept these thoughts in that light.

One thread going through the proposed ban on legal immigration to the U.S. is the effect it will have on the tech industry.  Those companies are concerned that some of the talent they need from other countries will be unable to either enter the U.S. on an H-1 visa or be allowed to immigrate here.

Another issue that the tech industry has struggled with is hiring a diverse workforce in the U.S.  Much has been made of the lack of women and (domestic) minorities in the tech field.

However, there are more programs to teach tech skills to minorities and girls than you can shake a stick at.  A Google search of “minority tech training” garnered almost 18 million hits and “girls tech training” got 198 million. So, there is not a shortage of opportunities to obtain coding or other tech skills in the U.S. and these programs have created a pipeline of talent.  Likewise, there are specific tech incubator programs for women and minorities who want to start their own companies.

Why is all of this important?  Primarily because for a company to be innovative it needs to look at the world through a window and not a straw.  There are more tech users outside of the U.S. than inside, so to be successful internationally companies need foreign talent.  Shutting our borders and wanting our companies to compete overseas is a difficult problem to solve.  Women and minorities outnumber white males in the U.S., so the companies that harness those perspectives are likely to be the most successful ones.

So, what might be the barriers to connecting talent to opportunity?

  • Hiring like us. I’ve written before about the built in bias we all have of wanting to be with others who have a similar background.  This is very prevalent when it comes to which schools the person attended, which sports s/he played, etc.  This can be alleviated by:
    1. Removing names from resumes.
    2. Removing schools and extra-curricular activities from resumes, unless you have data supporting their use (and the literature on the validity of training and experience measures is not encouraging).
    3. Recruiting where you have never recruited before. For instance, go to schools that are not currently represented in your workforce.
  • Candidates being unfamiliar with the hiring process. In our bubbles we think that every step of the hiring process is normal.  But, to use a tech example, if I come from an area without many tech companies, I might not be familiar with “whiteboarding” code problems as part of an interview.  Being transparent about the steps and letting people know what to expect removes a potential barrier between you and a qualified candidate.
  • Hiring processes that invite bias. Whether it is how you score your interviews or evaluate resumes, having an evaluation rubric will reduce bias.
  • Echo chambers on interview panels. Have diverse points of view (e.g., people from different departments) on your interview panel.  This is likely to encourage meaningful follow-up questions, even within a structured interview.

I do not think that lowering standards is an appropriate response to creating a more diverse and innovative workforce.  Building walls (metaphorical or otherwise) makes the problem worse.  Rather, companies need to build more bridges to find qualified candidates to bring different perspectives to their organizations.  Yeah, I get that it is more work, but a competitive marketplace demands it.

Is Seeing Really Believing?

Something I hear frequently from clients is, “I wish I had a day/week/month to see my candidates do the job.  Then I would make fewer hiring mistakes.”  It is, of course, an intriguing idea.  We test drive cars before we buy them.  Why not try out people before we hire them?

There is a long history of sampling work behavior in selection systems, whether it be using Assessment Centers to hire/promote managers and executives or having people make things for craft positions.  The accuracy of these types of assessments is good, falling somewhere between cognitive ability tests and interviews.  For candidates, the appeal is that they feel that they can really show what they can do rather than have their job related skills or personality inferred from a multiple choice test.

The issues in using a job tryout would include:

  • Paying the person for their time. There is an ethical, in some cases legal, issue in having a person work for free.  So, be prepared for your cost per hire to go up significantly.
  • Candidates would either need flexible schedules or plenty of PTO to participate in such a program.
  • Having meaningful work for the candidates to do. If you are going to narrow the gap between what the assessment and the job look like, then you would have to have projects that impact process, customers, etc that you would be willing to have a short-term contractor do.  Or, that you already have them doing.
  • Determining how to score the job tryout. Most organizations do a pretty poor job of measuring job performance over a full year, let a lone a couple of days.  Developing scoring criteria would be key for making good decisions and avoiding bias.
  • Having someone who is not your employee perform work that could affect your customers or the safety of others will make your attorney break out in a cold sweat.  This is should convince you not to do job tryouts, but you will have to sell that person on the idea.

What got me thinking about job tryouts was this article.  I was impressed that the company had thought through the problems in their selection process and came up with a creative way to address them. They certainly handle the pay issue well and they currently have the growth and profitability to make the program worthwhile. What is left unsaid, but communicated through some derisive comments about multiple-choice tests, is that they feel that using tests would not fit their culture well.

My concerns were that they are more worried about “fit” than skills.  This also translates into not having an objective way to evaluate how well a person did.  This leads me to believe that they would run into the problem of only hiring people who are just like them.

Lastly, they have a pretty high pass rate that “feels right.”  If I worked for them, I would be concerned that a lot of time and effort is being spent confirming what was seen in the less valid interview.  This is particularly true in a company where metrics are important for everything else.  Having people work for you for a few days and not having an objective way to measure how well they did is not going to lead to better candidates than a series of interviews.

Advances in selection tools will likely come from start-up companies who are not bound by tradition when it comes to hiring.  The tech sector presents a lot of opportunities to improve valid selection systems by their nature:  They are setup to disrupt and they gather a lot of data.  This presents a great platform for seeing what people do before you hire them to do it.

Learning to Manage

I cannot tell you how many times I have worked with a client who has told me some sort of story about how they promote from within, but have a problem with the supervisors and/or managers not being able to let go of wanting to do the technical work instead of managing the technical work.  It is not hard to understand.  People get into a field because of their interests or passion, rarely for their desire to manage others.

An organization’s challenge is to either create technical career opportunities or help those who are technically proficient to successfully move into management.  But how?  Here are some tips:

  • Clearly identify the skill sets required of managers and note how different they are from those required of technical workers. One of the places I would start is with Delegation and Holding People Accountable.
  • Make the management skill sets part of your internal recruitment AND learning and development process.
  • Require internal candidates to demonstrate management skills before being promoted through an assessment center or other valid selection process.
  • Start people at an appropriate management level, regardless of how technically proficient they are.

While I’m not one to think that sports are necessarily a good analogy for the business world, I found this article to be an exception.  It describes how John Elway,

a multiple Super Bowl winning quarterback with the Denver Broncos, learned management skills from the ground up.  He wasn’t made a Vice President of the team after he retired.  Rather, he honed his business skills in another field and then transferred them to a low level of football.  It wasn’t until he demonstrated success there that he was giving the big opportunity.  The time spent out of the spotlight clearly led to many learning experiences.

What makes the story powerful is the understanding that while there were some technical skills which would translate for him from the field to the front office, Elway (and his bosses) understood that others would have to be learned.  The organization was willing to let him take the time to learn how to manage and lead in a non-technical role.

The lessons for the rest of us are that:

  • Management skills are different from technical ones (e.g., the best sales person is not necessarily the best sales manager). We can use valid tools to identify which of our technical experts possess them.
  • Management development is a journey, as is the acquisition of any skill set.

The Challenge in Finding Good Performance Data

In validating tests, getting a hold of good individual performance data is key.  But, it is also one of the more difficult parts of the process to get right.

Intuitively, we all think we can judge performance well (sort of like we all think we are good interviewers).  But, we also know that supervisor ratings of performance can be, well, unreliable.  This is so much the case that there is a whole scientific literature about performance appraisals, even as there is currently a movement within the business community to get rid of them.Facetime For PC

But, what about objectively measuring performance (for every new account opened you get $X)?  If the Wells Fargo imbroglio tells us anything, it’s that hard measures of performance that are incented can run amok.  Also, while they are objective, single objective measures (sales, piece work manufacturing, etc.) rarely reflect the entirety of performance.  Lastly, for jobs where people work interdependently it can be very difficult to determine exactly who did what well, even if you wanted to.

So, what’s one to do?

  • Establish multiple measures of performance. For instance, call centers can measure productivity (average call time) and quality (number of people who have to call back a second time).  Don’t rely on just one number.
  • Even when a final product is the result of a group effort, each individual is still responsible for some pieces of it. If you focus on key parts of the process, you can find those touch points which are indicative of individual performance.  Again, look for quality (was there any rework done?) and productivity (were deadlines met?) measures.
  • Objective performance measures do not have to have the same frequency as piece work or rely on one “ta-da” measure at the end. Think of meeting deadlines, whether additional resources were required to complete the work, etc.
  • Don’t get bogged down in whether or not a small percentage of people can game the system with objective measures. We seem OK with rampant errors in supervisory judgment, but then get all excited because 1 out of 100 people can make his productivity seem higher than it is.  If you dig into the data you are likely to be able to spot when this happens.

When I hear people say that you cannot measure individual performance well, I cringe.  Of course you can.  You just need to know where to look and focus on what is important.

 

 

What We Find at the Intersection of Management and Psychology

There’s a figurative store where the roads of Management and Psychology cross.  The shelves up front have the new and shiny theory or practice.  More likely than not, it will join the former new and shiny ideas in the dingy back of the store.  Some are just flat out wrong and others are just a repackaging of what’s already out there.  It’s kind of depressing in that the time would have been better spent working on something truly innovative.

A common theme of these books is denigrating the role of intelligence in employee selection.  Let’s be clear—there is a mountain of research that shows that for most jobs, the smarter people (using Western measures of intelligence for doing jobs in Western economies) will perform better. And these tests are consistently better predictors than non-cognitive (e.g., personality) assessments.  Ignoring these facts reduces the value that HR brings to an enterprise.

Cognitive ability tests are not perfect predictors, and even if they were, there is plenty of room left to find additional ones. This is the space that the shiny new theories try to fill.  In addition, the new characteristics cannot be traits, but rather a skill that can be developed (y’know, so the author can sell seminars, workbooks, etc.).  This, combined with the current wave of anti-intellectualism in the U.S., leads to the search for something new, but not necessarily innovative.

The questions are:

  • What value do these “new” methods bring (e.g., do they work) and
  • Are they really different than what we already have?

One of the shiniest new objects in the store is Grit.  The name taps into a very American cultural value.  If you dig deep and try hard, you will succeed.  Right there with pulling yourself up by the bootstraps.  While its proponents don’t claim that it’s brand new, they won’t concede that it is just shining up something we already have in Conscientiousness (which is one of the Big 5 personality traits).  Conscientiousness is a good and consistent predictor of job performance, but not as good as cognitive ability.  Measures of Grit are very highly correlated with those of Conscientiousness (Duckworth et al. [2007, 2009]), so it’s likely that we are not dealing with anything new.

Does this spiffed up version of an existing construct really work?  For that, we can go to the data.  And it says no.  The research currently shows that only one of Grit’s factors (perseverance) is at all predictive and it doesn’t predict beyond measures that we already have.

I am all for innovation and industrial psychology is really in need of some.  But, chasing the new and shiny is not going to get us there.  It’ll just clog up bookshelves.

 

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