Gaming Your Way to HR Big Data

Economists are really taking a liking to human resources.  Perhaps this is an off-shoot of psychologists winning Nobel prizes in economics so they are moving into our turf.  Or, maybe it is because they love large data sets and technology has made them aware that there is a lot of information to be had in studying people.  Regardless, a NY Times economics reporter is writing about hiring practices.

There’s nothing in the article that I have not blogged about before.  It is about the promise of more accurate selection decisions coming from big data and new and creative ways to gather that data.  Nothing new there.  Regarding using gaming assessments, I will say that I would look at mean differences by age before implementing one.  Someone is going to get hit with a big age discrimination suit for using them and you do not want to be the test case.

What caught my eye in the article was that the reporting was lazy (companies just now coming up with new ways to validate tests?) and over-generalizations without substantiation (“Human beings still beat computers at detecting these sorts of soft skills, like empathy.”  Really? Tell me more.).  But, that is what happens when a reporter files a story on a topic with which s/he is unfamiliar.

There are really two facets to argument of using Big Data in selection:

1)    Better Validation:  Big Data gives us the opportunity to perform more detailed analyses of pre-employment data with more granular performance metrics (and more of them).

2)    Learn More About Candidates:  Big Data allows us to gather and analyze candidate behavior and information that was not previously available.  This could include online footprints from work related code that’s been posted online to books bought on Amazon.

The “better validation” argument is persuasive.  The weakness in validating selection systems isn’t the tests as they are normally (caveat emptor) well designed and reliable.  The problem is in measuring performance.  There are a few jobs where there is a steady stream of reliable performance data (call centers, for one), but they are not the majority.  Using multiple measures of job performance over time will only help our understanding of the accuracy of existing tests and the development of new ones.

The “learn more about candidates” argument has some pros and cons.  If focused on job-related behaviors (posted code online), there is a lot of value.  However, fishing for buying or search behavior online and then correlating it with future job performance would need some further justification to balance out potential invasion of privacy issues.  Also, the adverse impact of what is found online would have to be evaluated.

I welcome those from other fields into employee selection.  New ideas and perspectives will almost certainly contribute to the field.  It would be nice if they learned a little bit about us first so they could tell us how their new approach would add to our existing knowledge and practice.

For more information on pre-employment testing, test validation, skills assessment and talent management, please contact Warren at 310 670-4175 or  [email protected]

Thanks to Chris Christie for the Reminder That Culture Matters

The term “corporate culture” has given way to “employee engagement” in describing the atmosphere in an organization.  It is one jargon change that I do not mind.  If you can link engagement to behavior, then it is a valuable construct.  However, organizations do have cultures and norms which affect how people act on the job.  Think about where you work.  Are people encouraged to innovate or execute processes?  Can management be questioned or are instructions supposed to be carried out?

A clear example of culture affecting behavior has gotten New Jersey Governor Chris Christie in trouble.  Part of Christie’s appeal is that he speaks his mind and projects himself as a tough guy.  People who disagree with him are publicly called “stupid” or “idiots.”  This candor is refreshing to some, but to others he is a bully.  Culturally, it shows that those who disagree with the office are lesser people.

Essentially, when Christie was running for re-election, he (or his staff) asked mayors of different political parties to endorse him.  There was no doubt that he was going to win big, but his strategy for higher office includes showing that he has support across the board.  In one town, the mayor said he would not endorse the governor, so Christie’s staff decided to inflict some retribution by messing up traffic in the city for a few days.

After all of this became public, Christie threw up his hands in astonishment, fired one of the staffers responsible (oh, and calls her “stupid”), allowed others to resign, and pleaded ignorance because he did not specifically direct them to punish the mayor.  He just cannot understand why they would do such a thing.

They did such a thing because they thought the boss would approve.

The object of management is to get things done through people.  Managers cannot give their direct reports instructions for every task, so, to be effective, leaders need to convey expectations of behavior and performance.  This occurs with a combination of clear communication and a strong culture established by the leaders.  With those in place, employees will meet leaders’ expectations without being told what to do.  This was clearly the case in Governor Christie’s organization.

Leaders need to know that their behavior serves as cues for their employees, especially if those behaviors are rewarded.  If the top person treats others with respect, employees are more likely to do so.  If the leader punishes dissent, middle managers will as well.  It is not that hard to figure out.  You would think that a guy who is smart enough to identify the idiots would know this.

For more information on employee engagement and leadership, please contact Warren at 310 670-4175 or  [email protected]

Not So Young Frankenstein

Today’s guest post is from Dennis Adsit (@DennisAtKombea), a fellow industrial psychologist and an expert in call center processes.  Even if you don’t support a contact center, you will appreciate the article’s themes of how errors and poor service get baked into how we operate.

Thank you to Dennis for his contribution!

Let’s say you were a modern day Dr. Frankenstein and you decided you wanted to bring an organizational creature to life.  Let’s further say you were a nefarious Dr. Frankenstein and the organizational creature you wanted to bring to life was one that continuously produced errors…lots of them…day in and day out.  What would go into the design of an error-producing organizational machine?

First, you would have hundreds of detailed processes that the people in the organization would be expected to perform.  Forcing people to execute lots of different process with lots of details increases the probability of errors.

Second, you would not define a standard of what constituted the correct way to do each of those processes.  Some processes would be defined. Others would not.  Some processes would ostensibly be defined, but people in the organization would disagree about what really was the correct disposition.  When “correct” is not clear, errors can bloom.

Third, you would have those processes change frequently.  Big changes and little changes…just constant process changes.  This keeps the workers off-balance and increases the chance of errors.

Fourth, you would have poor change control mechanisms.  Processes would change but the changes would not always be effectively communicated.  There would be no master register of changes and no way to effectively determine if all of the updated processes were being correctly followed.  The lack of effective process performance feedback is great for error making.

Finally, on the process side, you would minimize the amount of automation available to help workers get the details correct.  If something had to be drilled they would have to do it by hand.  No machine to help employees get the exact size hole in the exact spot.  If there were a lot of details to remember, people would just have to suck it up and remember them.  Further, the job aides you did give them would not work well together.  Having old legacy systems that require a lot of cutting and pasting increases the chances for errors.

Let’s move onto the people in this error-producing organization.  A seventh characteristic of a well-designed error making organization would be a low hiring standard.  No college degree required, no employment tests to assess baseline competency.  The lower end of the labor pool is best for higher errors.

After hiring low quality workers, give them poor training.  The training around the processes would be incomplete and the acceptable performance standard for completing the training would be low.  An adequate demonstration of basic competence (70% passing score…which of course is 30% errors) would be enough.  Having poorly trained and mediocre workers makes for really high errors.

Next signal to them that they are low quality by keeping them on a tight leash…make it known that you know when they are a minute late coming back from breaks and lunches…ask them what is wrong if they are in the bathroom too much.  Further send this “you’re completely replaceable” message by telling them that there is a large pool of applicants waiting for their job.

It also helps if you can make the work itself super boring and repetitive.  There is nothing that drives errors better than a boring repetitive job as it leads to steps getting skipped.  Oh and make the environment randomly stressful by, say, workers getting yelled at by customers. High fatigue and stress are great for errors.

Finally, don’t pay the workers that well.  Low wages and no variable compensation for higher performance.  When everyone gets the same no matter how they do and pay is based on tenure, which is another way of saying how long they last, it really helps people not care which feeds the error machine.

And speaking of tenure…since the jobs are boring and stressful, and the workers don’t feel valued, they quit…frequently.  We don’t care about them quitting, because as we told them, “there is more where you came from.”  We want high turnover because it means lots of inexperienced employees which is like oil for the error-machine.

What do you think of our design?  How could an organization designed like this not be a world class error-machine?

This is not a dystopian vision of some “Breaking Bad” science fiction future.  No, this error-making organization exists today.  In fact there are lots of them and they have been around for years.  It’s known as a call center.

I am not trying to be Debbie Downer here.  I am trying to shed light on the fact that the 40-year old paradigm for the design and management of call centers almost guarantees a high error rate.  A call center leader who doesn’t believe her/his organization is an error machine is just plain struthious.

It, of course, doesn’t have to be this way.  The fixes are right in front of us…just do the opposite of what you would do in the design of the error-machine.

The problem is all of those activities drive up short-term costs and many of today’s call center leaders can’t see past that.  It is analogous to when American managers visited Japanese plants in the 80′s where they couldn’t believe that employees had the power and were encouraged to “stop the line” to fix quality problems.  They couldn’t see that the long term cost reductions due to the increase in quality far outweighed the short-term cost increase of interrupting the production run.

One fix with immediate ROI is allowing the agents to use automation.  I go into detail in this post Can a Focus on Getting Calls Right Have the Far-reaching Benefits Just-in-Time Had? listing all the sources of financial return that come with defining “correct” and using automation to ensure the agents handle each call correctly.

There is a lot of talk these days about creating amazing customer service experiences and getting the front-line agents to turn customers into zealots à la Zappos.  I think for many companies and call types, this is the right direction.  But before we ask our agents to love our customers to death, isn’t it important that our agents know how to correctly resolve the customers’ concerns…the correct diagnostic questions, the correct resolution steps, the correct prices, the correct return address, entering the correct information, providing the correct disclosures…not some of the time, but every time?   Can you really fall in love with a car brand that delivers a great service experience if your car is constantly breaking down?

Defining Leadership Success

There are as many measures of leadership success as there are theories of leadership:  Follower satisfaction, lower turnover, higher productivity, etc.  However, at the end of the day, successful leadership is one component to a successful organization.  So, what’s a successful organization?

For micro credit lenders, a successful organization is one that pays back its loans.  This speaks to leadership in that the owner has to have the integrity to want to pay back the loan, as well as the business acumen to make enough profit to afford the payments.  In the absence of credit history (which really isn’t available for micro credit borrowers), how does the bank determine who is a good risk?  By using a good test, of course!

The Entrepreneurial Finance Lab (EFL) has developed a test to determine who is more likely to pay back a micro credit loan and run a profitable business.  Their assessment model contains elements that we would normally use for assessing leadership potential:  Intelligence (note that is measured using non-verbal and non-numeric methods), Ethics & Character (personality), Business Skills, and Attitudes & Beliefs (more personality).  Interestingly, experience is not on the list. Their results show much stronger correlations between the test and profitability than with paying back the loans.  The researchers attribute this to methodological issues, but I think it is more complex, having more to do with culture and expectations rather than individual differences.  You can read a bit more about it here.  Thanks to Bryan Baldwin for bringing it to my attention.

What is important to remember is that these are predictions of success for those who have never owned a business.  It is a strikingly similar model to measuring leadership potential in those who have never (formally) led others.  This is something which has been done quite well over the years with assessment centers and other tools.  The results are also fairly robust across cultures, though the authors do point out that the model is more accurate when the scoring is customized for each country.

In mature economies, senior leadership is not so much hired to pay back a loan as it is to deliver value to shareholders/investors, which in a sense is paying back money put into a company.  We can talk about the many steps and processes required to get to that point of returning value, but effective leaders are the ones who do this over a long period of time (not just meeting quarterly numbers).

What are you doing to evaluate these traits and abilities in your leaders?

For more information on leadership and employee engagement, please contact Warren at 310 670-4175 or  [email protected]

Thanks for coming by!

Please provide this information so we can stay in touch.