Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
As I was browsing through the Sunday paper last week there was one article in particular that really caught my eye. It was written by Paul Sullivan of the New York Times and it shared the findings of a new academic study Money Beliefs and Financial Behaviors: Development of the Klontz Money Script Inventory published in the current issue of The Journal of Financial Therapy.
Disclaimer: this is a heavy blog post but if you finish it I think you’ll understand why I found it compelling enough to share with you as a Hiring Manager.
He found that some people were under stress about having too little money while others were anxious about losing what they had or felt guilty for having so much. Some people immediately disliked anyone with money, while others would spend their money immediately without regard to the future.
The Klontz study asked 422 people about 72 money-related beliefs and then analyzed correlations among the answers. This produced four broad categories that Klontz called “money scripts”: money avoidance, money worship, money status and money vigilance.
- Money Avoidance: people who may be worried about abusing credit cards. They may believe that they do not deserve to have money and may sabotage their own financial well-being. People in this group tend to have low incomes and net worth. They also tend to be younger.
- Money Worship: the opposite of those with avoidance, but their behaviors are equally destructive. They believe that an increase in income or a windfall will make everything better and love the status derived from the things money can buy. This belief also lands people in debt because they use whatever credit they have to buy things that will impress others. “They believe money will solve all of your problems,” Klontz said. “This is the money belief pattern that afflicts the majority of Americans.”
- Money Equals Status: occurs when people’s self-worth is linked to their net worth. These people often take bigger financial risks because they want to have the stories of big gains to impress their friends. (Don’t expect them to tell you when those big bets do not pay off.)
- Money Vigilance: The only affliction that did not have an overwhelmingly negative impact on people’s financial future. People with this disorder do not like to share information about their income or wealth, but they also do not spend foolishly. Still, excessive wariness about spending can keep these people from enjoying the benefits of what money can buy. On the other hand, while they did not necessarily have higher incomes, they paid off their credit card bills each month. “Maybe some anxiety and vigilance around money is good for your bottom line,” Klontz said.
As Mr. Sullivan insightfully pointed out, “Not surprisingly, the four money scripts illustrate problems that have less to do with money than with what money represents.”
Most of the people in the study identified themselves as “middle class” during their developmental years. Another common thread was how people remembered a financially traumatic moment in their life. Klontz described a case in which a family was beset by debt and about to lose its house. In one case, the grandmother bails out the family. In the other, the family figures out a way to keep the house on its own. The outcome is the same, but the takeaway can be different.
“If grandma swoops in and saves the day, you could walk away from that thinking that you don’t need to worry about money,” he said. “Or where there was a lot of talk about losing the house, that could impact you so you live your life afraid of losing everything.”
What I found most interesting for you as a Hiring Manager was this: One of the goals of the study was to use the results to create a test that therapists and financial advisers could use to quickly understand their clients’ beliefs about money. Klontz estimated that administering the test could save therapists hours of conversation and help them understand how a patient came to a particular belief about money.
Conclusion: if someone you’ve got on your team grew up in an environment where their parents demonstrated destructive behaviors but got bailed out, don’t be surprised when that employee misses deadlines and expects someone else to jump in and save them.
One of my very favorite songs is called Down Together by the Refreshments. The refrain includes the lyrics, “Cars break down and people break down and other things break down too so let’s go…down together”.
I had the chance to have dinner with Chris Mursau last Tuesday night in Chicago and we were discussing the single, most important reason why companies continue to experience a 50% failure rate when it comes to hiring. His assessment: Communication Breakdown.
How does this manifest itself thousands of times a day in the US alone?
- Hiring Managers understand what their priorities are in their role and they (rarely) include hiring talent to earn their bonus. As a result they email someone in HR that says “write me a job description“
- HR, not quite sure what to put in the job description, references similar jobs the company has filled in the past and creates it to get it off of their To Do list.
- The job is posted on the Internet somewhere and the resumes that come in get screened by the HR associate who wasn’t sure about the role in the first place.
- The resumes that pass the initial muster of the HR associate are forwarded to the Hiring Manager who looks at a few and decides to interview some people (though they’re not even sure what the HR team posted on the web)
- The first candidate comes in and the Hiring Manager asks a couple of associates to interview the person too (though these associates don’t have a clue what they’re even supposed to be interviewing for).
- The Hiring Manager narrows the pool down to 2 and then calls HR to ask them to decide who the best one is (again, without providing the HR team the definition of “best”).
If this sounds remotely similar, you’re not alone!
As you’ve likely read on this blog before, I believe there are 3 reasons why a new hire doesn’t work out:
- You failed to clearly define what you needed someone to do
- You failed to clearly articulate to the new hire what you needed them to do to be successful
- You failed to gain the agreement of the new hire on what it will take to be considered successful
I completely understand if you brush off my counsel but choosing to ignore this when even Chris agrees that it’s true is a true sign of foolishness.
Conor Neill, a close friend of mine and a prominent Entrepreneur in Spain, wrote this short story below for the Entrepreneurs’ Organization’s blog. It’s a great reminder of just how important attitude is in hiring.
Two men, Bill and Frank, begin working at a hotel the same day. They are intelligent, educated and ambitious. The manager of the hotel greets them and hands them both doorman uniforms. They are to begin opening and closing the doors, helping with bags, flagging taxis, etc.
Bill thinks “Doorman? I am worth more than this! I could manage this hotel better than the current guy.” But he doesn’t have an alternative offer and he needs the money, so he does the job anyway. He maintains a pained grimace on his face and deals with customers and other staff in a negative way because he is “better than this.”
Frank, in contrast, thinks “Okay, doorman. It’s not what I had in mind, but hey, I get to spend some time outside, get to meet the customers, and I’ll learn about how this hotel works.” He sets to work with a smile on his face and finds that he quite enjoys the small challenges he faces as a doorman at such a prestigious hotel.
After six weeks, a position at the front desk opens up, and the hotel manager immediately thinks of Frank. Frank is promoted and immediately brings his positive attitude to the front desk of the hotel. Several years later, Frank is the hotel manager. He leaves late one evening and there, opening the door with a hard-wired grimace, is Bill.
Is it luck, or is it fate? Bill will spend forever in a job that he hates and Frank will love every job that he is given. This story is such an inspiration, because it encourages me to always stay positive about my responsibilities and to find the reward in every remedial task. When hiring staff I spend more time exploring attitude and self-motivation than I do exploring capabilities. I also spend time looking to direct my employees toward challenges that are motivating for them.
When it comes to running a business, I’ve learned it’s not just about the results, but the work you put in. That’s where successful people thrive.
On February 9th, 2011 I began this series on Discrimination with some thoughts on the reduced productivity of smokers.
I also started the conversation with this:
What I’m hearing from Business Leaders all over the United States is, “I want to hire US workers but their costs are too high for me if I end up hiring people who aren’t productive enough.”
During the course of this series on Discrimination I’m going to say some things you won’t agree with, may take offense with and that will border on legality. However, until employers ARE allowed to “discriminate” based on these things, the value of the US Worker will continue to decline (on average) and the fiduciary pressure to hire off-shore talent will be greater.
If I haven’t scared you away yet, here’s the next installment:
About a month ago the Comptroller of the State of Texas tallied the business costs of obesity. This is what they said, “Obesity is expensive for Texas employers, costing them $9.5 billion a year in worker health costs, absences, disability and reduced productivity.”
That number is nearly 3 times what the same office calculated it to be in 2007.
The report, Gaining Costs, Losing Time, estimates that Texas employers paid $4 billion in direct health insurance costs in 2009. Indirect costs included $1.6 billion for obesity-related work absences, $3.5 billion for reduced productivity of obese workers, and $328.1 million for disabilities linked to obesity.
$3.5 BILLION for reduced productivity in Texas alone.
In 2006, Leade Health published a report entitled The Business Case for Weight/Obesity Management Using Health Coaching Interventions.
They called Obesity “The Number One Factor in Productivity Loss”. The paper goes on to cite the following statistics:
- Medical costs for obese employees are 77 percent higher than for healthy weight employees; obesity-related disabilities cost employers up to $8,720 per claimant.
- Obese workers have the highest prevalence of work limitations, with 6.9 percent experiencing such limitations compared to three percent among normal weight workers.
- Obesity is estimated to account for 43% of all health care spending by U.S. businesses on coronary heart disease, type 2 diabetes, hypertension, hypercholesterolemia, stroke, gallbladder disease, osteoarthritis of the knee, and endometrial cancer combined.
Lastly, in August 2010 the Brookings Institute released a report that went even further than most people have ever been willing to go. It’s called Economic Impact of Obesity in US and it includes results like:
- There is a positive and statistically significant correlation between obesity and measures of absenteeism. Specifically, at a North American division of Shell Oil Company, 3.73 additional days of work were lost per year for each obese employee relative to their normal-weight co-workers.
- A similar report referenced in this same white paper was able to prove that employees considered at risk for obesity were 1.23 times more likely to be in the ‘high-absenteeism’ group than those who were not. That author (Durden) showed that obese workers were 194% more likely to use paid time off than their counterparts.
- In conclusion, the report found that the productivity losses to Shell Oil Company alone due to absenteeism effects of obesity were worth $11.2 million per year. This amount includes only the direct productivity costs of absenteeism (that the employee is paid while not at work); it does not account for any secondary effects on training, morale, or other network effects.
In closing and in defense of discrimination (especially based on the above facts): it is my opinion that obese workers should absolutely be considered inferior to their non-obese counterpart if the skill sets are on an equal level.
A couple of months back I interviewed Patrick Thean about the success he’s experienced in building scorecards for new hires. He provided some great suggestions of the metrics he’s used along with the real-life example of presenting a scorecard to a prospective hire to help her “opt out” of the interviewing process because she determined she wasn’t capable of the job.
- You failed (as the Hiring Manager) to clearly articulate what you needed someone to do
- You failed (as the Hiring Manager) to tell the new hire what you needed them to do
Having a scorecard is a HUGE first step in making sure that you’ve put in the time to define what will determine success for someone who’s just joined your team.
Last month (January ’11) I had the opportunity to meet Pepe Charles from MAP. He’s an expert in helping organizations develop what they call “VITAL FACTORS”. You won’t be surprised to learn that these vital factors are another name for…wait for it…scorecards.
I asked if they’d be willing to share their proprietary vital factors with you as readers of this blog. They graciously said yes and so you can find a very robust list of things that you can measure across departments and skill sets here.
The day that I heard Pepe speak about these vital factors he brought something up that really stunned me (and I was also a bit embarrassed for not having thought of it myself earlier). There’s a very high likelihood that you’ve heard of the acronym SMART for goals. It commonly accepted that the acronym stands for:
- S: Specific
- M: Measurable
- A: Attainable
- R: Realistic
- T: Timely
What Pepe suggested was that the A (typically referred to as attainable) should actually stand for AGREED TO. What a revelation!
In summary, I now have 3 reasons why someone you’ve just hired won’t work out:
- You failed (as the Hiring Manager) to clearly articulate what you needed someone to do
- You failed to tell the new hire what you needed them to do
- You failed to come to an agreement with the new hire on what they needed to do
[Author's Note: at no time during this series centering on Discrimination will I ever suggest or condone discrimination of anyone based on race, gender, nationality, religion, etc, etc.]
On February 7th, 2011, President Obama spoke to the Chamber of Commerce. One of the statements that he made in that speech was
“I understand the challenges you face. I understand that you’re under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders. I get it. But as we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation. That’s what I want to talk about today – the responsibilities we all have to secure the future we all share.”
What I’m hearing from Business Leaders all over the United States is, “I want to hire US workers but their costs are too high for me if I end up hiring people who aren’t productive enough.”
During the course of this series on Discrimination I’m going to say some things you won’t agree with, may take offense with and that will border on legality. However, until employers ARE allowed to “discriminate” based on these things, the value of the US Worker will continue to decline (on average) and the fiduciary pressure to hire off-shore talent will be greater. I’ve chosen to focus my efforts on the characteristics of American Workers that reduce PRODUCTIVITY.
Part 1: SMOKING
Maryland-based Scotts Miracle-Gro, in March 2006, issued a new policy stating that they will not hire people who smoke on or off the job, and will seek to eliminate smoking in its existing work force.
Shortly after that they were sued for wrongful termination after a recently hired worker (Rodrigues) tested positive for nicotine. He had been on the job for 2 weeks. In December 2009 Scotts won the legal battle (in Massachusetts, no less).
Rodrigues’s lawyer, Harvey A. Schwartz of Boston, said he is appealing the ruling to the US Court of Appeals for the First Circuit. He characterized the firing as an extraordinary example of a company meddling in an employee’s private life in an attempt to promote healthy habits and drive down an employer’s healthcare costs.
Scotts was on the very bleeding edge of a new movement by employers to “discriminate” in the application process by making smoking an automatic disqualifier.
What justification did Scotts have for putting a ban like this in place?
- In Germany they were able to prove that healthcare costs for smokers was nearly 4x that of non-smokers and that costs due to work-loss days for smokers was over $16.4 billion DEM
- Tobacco Control, an international peer review journal that studies the impact of smoking determined that, “Current smokers had significantly greater absenteeism than did never smokers, with former smokers having intermediate values; among former smok-ers, absenteeism showed a significant decline with years following cessation. Former smokers showed an increase in seven of 10 objective productivity measures as compared to current smokers, with a mean increase of 4.5%. While objective productivity measures for former smokers decreased compared to measures for current smokers during the first year following cessation, values for former smokers were greater than those for current smokers by 1–4 years following cessation. Subjective assessments of “productivity evaluation by others” and “personal life satisfaction” showed significant trends with highest values for never smokers, lowest for current smokers, and intermediate for former smokers.
- LiveStrong’s studies have shown that smoking lowers the health of your body, which can lead to being sick more often — in fact, according to the Americans for Nonsmokers’ Rights, smokers miss an average of 6.16 days of work each year due to sickness. Nonsmokers, by comparison, miss an average of 3.86 days. In addition, 1.24 percent of smokers were admitted to hospitals due to their sicknesses, compared to 0.76 percent of nonsmokers, and the average length of stay for smokers was 1.44 days longer than nonsmokers, which contributes to time away from work.
- According to the U.S. Centers for Disease Control and Prevention, smoking and secondhand smoke cost an estimated $92 billion dollars annually to businesses in the United States. This works out to an estimated $3,391 dollars lost in productivity to each smoking worker, which is divided up into amounts of $1,760 lost in direct workplace productivity and $1,623 lost in costs related to medical expenditures. What’s more, nonsmokers can be affected by secondhand smoke — their costs can reach $490 per affecting smoker each year.
In closing and in defense of discrimination (especially based on the above facts): it is my opinion that smokers should absolutely be considered inferior to non-smokers if the skill sets are on an equal level. If America is going to become competitive again in the global marketplace, employers shouldn’t be scared of discriminating based on this vice of prospective employees.
Sure, there are some experts out there who will tell you that you can always hire A-Players, but I’m not one of them. Considering 54% of all hires are mis-hires (according to a 2000 Fortune Study) we clearly have a problem in America.
The content for discussion today comes from Global Learning Resources CEO Kevin Wheeler. He suggests that great performers tend to emerge over time, rather than appear fully formed at the interview. According to Kevin, there are four ways to improve your hiring and development systems.
1. Don’t look for “A” players, because you don’t really know who they are. Those that you think are the best, the brightest, or the smartest may not be. The problem in looking for the best is that you are always using criteria that are suspect. The fatal flaw inherent in all competency systems is change. What has been successful or what is successful in a particular place may not be in another.
2. Provide development opportunities broadly for everyone and reward and promote those who take advantage of the opportunities. If we believe that talent often emerges where we least expect it, we cannot afford to limit development opportunities only to certain levels or types of employees.
3. Have recruiters aggressively monitor and source internally. Most of the very best talent comes from within and from below. We are all enamored with the outside “guru,” and frequently pass on the person right in front of us who is equipped with the skills, the cultural understanding, and the motivation to excel.
4. Look at selecting people for broad-based competencies. We should be looking to hire people with motivation to learn, with team experience and success, with cultural compatibility, and with a basic technical skill set that can be developed by experiential opportunities and good mentoring. We need to move away from rigorous narrow competency definitions and reliance on experience as an indicator of performance.
Do I disagree with anything that Kevin has shared up to this point?
If you’ve read this blog for awhile and have implemented even 10% of what you’ve learned, you SHOULD have an issue with this last statement of his: “A” players are hard to define and impossible to recruit consistently.
In addition to blogging here I also contribute content to Recruiting Blogs. A slightly modified version of my recent post “How to Prepare for a Topgrading Interview” drew quite a few comments but there was one in particular that I felt deserved some additional attention.
I really believe in the principles of Topgrading, and have cited it along with Brad Smart many times in my own writing, but the candidates I’ve seen subjected to CIDS interviews have NOT had wonderful or even fair experiences. I have three issues with CIDS:
1. It doesn’t apply context. The behaviors analyzed in a CIDS interview can be from 20 years ago, and don’t get asked in a way that aligns with the current goals for the position. I advocate performance objective based questions that elicit the specific skills and experience needed today from the candidate, in the context of the specific job, not in a vacuum.
2. CIDS provides too much ammunition by which to DESELECT a candidate. Not every behavior or lack of behavior from someone’s past is relevant to what is needed today.
3. CIDS interviewers are often inexperienced, and don’t know how to really use the tool to best advantage.
Here are my thoughts in response to Mark:
1. The behaviors analyzed in a CIDS interview may be from 20 years ago but it’s the interviewer’s fault if they allow the discussion to drift into conversations that don’t necessarily align with the current position. On top of that, the basic questions that are used in every position are critical information that you’d want to know about someone – regardless of if the experiences are 20 years old. Example: What was the #1 thing you regret about not accomplishing in that role?
2. At HireBetter this is a discussion that we have a lot. Recommending someone for hire takes courage. It’s nearly always easier for a Hiring Manager or outside consultant suggest that inaction is better than action. Roosevelt nailed it in 1910 when he said [paraphrasing] “It is not the critic that counts. The true credit belongs to the man in the arena.” With that said, if a Hiring Manager has done their homework, they’re clear on what they need someone to do and they conduct a proper CIDS interview, they’re going to be more prepared to make a hiring decision than with any other kind of interview that I’ve seen conducted.
3. It doesn’t take much for someone to learn how to conduct a CIDS interview. However, as I shared in my response to #2, from what I’ve witnessed a poorly conducted CIDS interview is still significantly better than an “on the fly” interview that doesn’t have a structure, purpose or plan.
Bottom line: Mark brings up some good questions and CIDS interviews do have some shortcomings but, in my opinion, there’s not much else out there that will give you a better understanding of if the person you’re interviewing is right for the role you’re looking to fill.
Those who have heard me speak publicly or have been clients of HireBetter are very familiar with my insistence that Job Descriptions are largely worthless when written by starting at the beginning. What I encourage people to do instead is to consider the Outcomes first.
The exercise goes a bit like this: at this time next year, what will this person have accomplished that will make you consider them “successful“. To drive the point home further I like to use this example:
You’re going to take this new employee out to dinner at either (a) the nicest restaurant in town or (b) Applebee’s. How will you decide the right destination when looking back on their performance?
The running joke that I’ve always chuckled about in my head is, “Does Applebee’s even exist any more?” As it turns out, it does. I found myself in Wal-Mart earlier this week with my kids redeeming gift cards from Grandma and I snapped this picture while checking out.
Food for thought:
- How would a superstar feel about you giving them an Applebee’s/Outback Gift Card as a Holiday Bonus?
- Would a bureaucrat and time-waster feel the same way or would they be thrilled at the gesture because it meant you knew their name?
P.S. If you’re remotely interested, here’s a link to download Applebee’s Nutritional Information – ouch!
I found this interesting: in the past couple of months the top keyword search strings that lead people to this blog were often about preparing for a Topgrading Interview. The irony is that you can’t really “prepare” for a Topgrading interview. Yes, journaling about your career history, reflecting back on the praise you received or the criticism that challenged you, thinking about your Boss and what you liked or disliked about them – these are all good ideas.
Author’s Note: A couple of months ago I blogged on the dumbest interview questions that people ask and pointed to some of the websites where you can review those questions (and read the canned answers that make candidates sound really sincere).
What’s so different about the Topgrading interview is, from my experience, that it not only inspires candidates to be honest but forces them. My mother taught me that lying is really tough because you have to always remember what all of your previous lies were. As those lies pile up you really end up in a tough place.
That early lesson has proven itself to be very helpful. When I’ve worked with some clients directly and helped them conduct a 4 Hour Interview, I’ve picked up a few things that seem to apply across all industries:
- Executives can easily dupe you in a 30 minute interview
- They can often lie their way through a 1 or 2 hour interview because they’ve likely been on the hot seat before
- In hour 3 it’s fairly easy for the Interviewer to recognize if the Candidate is lying or has a track record of blaming others, not delivering on commitments, etc.
- By hour 4, the Candidate is “naked”. They’re either (a) being honest and feel more trusting of the non-judgemental atmosphere or (b) they’ve lost track of the fabrications they made up 2 hours prior and are wrapped up in a web of lies so large that they’re exhausted from trying to keep up with themselves.
With all this said, the Topgrading Interview is also the fairest and most objective interview I’ve ever conducted or observed. Its structure (Comprehensive, In-Depth, Structured or CIDS) is straightforward, no questions come out of left field (“Why are manhole covers round?”) and it gives the Candidate the chance to brag about themselves as equally as they reveal their mistakes or times of regret.
Wrap Up: If you’re being asked to take part in a Topgrading Interview, go in with a clear conscience and a willingness to show vulnerability. But above all: BE HONEST.
P.S. Just in case you have ever been asked the question “Why are manhole covers round?” and you want to be argumentative, you might use this picture below to build your case. — JD