Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
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.
The story told of Icarus was his attempt to escape from Crete by means of wings that his father constructed from feathers and wax. He ignored instructions not to fly too close to the sun, and the melting wax caused him to fall to his death.
What in the world does this have to do with making better hiring decisions?
Simple: in order for Icarus’s wings to melt there had to be a sun. And in hiring, the sun means a lot more than you can possibly imagine.
I grew up in the Northeast (AuSable Chasm to be specific). Summers were exceptional! We had long days where the weather hovered around 80 degrees and the sun wouldn’t set until about 9pm. My sisters and I would play for hours in the river behind our house. I’d compete in baseball games that would start at 6 and end at 8:30 but there was never any need for the fields to be lit because the sun hadn’t set yet. The way I’m describing it you’re probably thinking to yourself, “that sounds like paradise.” For those couple of months a year, it was.
But with every ray of light there’s usually a dark tunnel.
For us, that was winter. It was dark when we woke up, dark when we got on the school bus and then dark again when we got out of school around 5pm. We’d literally never see the sun except through some windows as we walked from classroom to classroom. Add to that it was often so cold and overcast that you couldn’t go outside anyway. This kind of environment became oppressive to a lot of people (my Dad, for one). It wasn’t until just 25 years ago that people started recognizing what was happening. Wikipedia has this to say:
Seasonal affective disorder (SAD), also known as winter depression, winter blues, summer depression or summer blues, is a mood disorder in which people who have normal mental health throughout most of the year experience depressive symptoms in the winter or summer, spring or autumn, repeatedly, year after year.
Once regarded skeptically by the experts, seasonal affective disorder is now well established. Epidemiological studies estimate that its prevalence in the adult population of the US ranges from 1.4 percent (Florida) to 9.7 percent (New Hampshire).
The US National Library of Medicine notes that “some people experience a serious mood change when the seasons change. They may sleep too much, have little energy, and may also feel depressed. Though symptoms can be severe, they usually clear up.” The condition in the summer is often referred to as reverse seasonal affective disorder, and can also include heightened anxiety.
How can this knowledge help you as a Leader and Hiring Manager? Simple: Behavioral-based interviewing, when conducted properly, means you should avoid questions that allow someone to answer with their opinions. Whether or not someone has lived and thrived in “the North” or “the South” before should absolutely be part of your interviewing process. Just because someone says they’ve “Always dreamed of living in Seattle because they’ve heard great things” doesn’t mean they’ll be able to survive the lack of sun. The same goes for Austin – the summers are brutal and we don’t go outside much at all from late June until early September.
SAD is real. Accept that and use the knowledge to your advantage when making a critical hiring decision that will involve moving someone from one latitude to another.
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
The EO Network recently launched a blog entitled Overdrive. I follow this in my RSS Feed and today it rewarded me with an article that I’m sure you’ll appreciate heading into a New Year.
This external content was provided by Dr. Todd Harris, a Director of Research at PI Worldwide.
INTERNAL AND EXTERNAL INFLUENCES ON PERFORMANCE
Organizations throughout the world have increasingly adopted team-based work structures. Consider the following points.
- As many as half of the Fortune 500 use teams in some part of their operations.
- Studies of managers show that they spend 30 percent to 80 percent of their time in team meetings.
- An insurance company found that their average executive spent two out of every five working days collaborating with small groups.
- As many as 11 million meetings occur daily in North America.
Most models of the organization of the future are premised on teams surpassing individuals as the primary performance unit in the company. Clearly, changes in the world of work such as advances in information technology, globalization, hyper-competition, knowledge-based work, and worker empowerment will mean the workplace of the future will be much more collaborative than its predecessor.
Unfortunately, many organizations have found that teams are not a universal panacea. In fact, academics and management consultants often cite a “50-percent failure rate” for teams, in that half of work teams fail to achieve their goals. To perform well, a team must surmount three hurdles. It must (1) exert sufficient effort to accomplish the task at an acceptable level of performance, (2) bring adequate knowledge, skill and ability to bear on the task work, and (3) employ task performance strategies that are appropriate to the work and to the setting in which it is being performed. Performance on these three “hurdles” will be influenced by factors that are both “internal” to the team and factors that are “external” to the team.
- Task Structure: Is the team task clear, and consistent with the team’s purpose? Does the team have a meaningful piece of work to do for which members share responsibility and accountability, and that provides opportunities for the team to learn how well it is doing?
- Team Composition: Is the team well staffed? Is it the right size, given the work to be done? Do members have the expertise required to perform the task well? Do they have sufficient interpersonal skill to function collaboratively? Are team members so similar in background and perspectives that there is little for them to learn from one another? Or are they so different that they risk having difficulty communicating and coordinating with one another?
- Core Norms: Expectations of what is “acceptable” team behavior tend either to be “imported” to the team by members or established very early in the team’s lifespan. Articulating these “norms” ahead of time via a “team charter” or “team vision statement” can be very helpful, and should cover areas such as how the team will make decisions, communicate and evaluate itself.
External team factors to consider include:
- Reward System: Does the company’s reward system provide recognition, reinforcement and compensation that are contingent on team performance? Are rewards administered to the team as a whole or to individuals within the team? Does the reward system truly encourage team members to work collaboratively?
- Educational System: Is training or technical assistance available to the team for any aspects of the work for which members do not already have adequate knowledge, skill or experience?
- Information System: Does the team have ready access to the data, tools and other resources that enable superior performance?
- Organizational Culture: Does the company for which the team works have a collaborative culture that genuinely fosters and supports teams? Or is it a culture that still promotes and recognizes individual achievement? Do the company’s top leaders really “buy into” the concept of teams?
Those who create, lead and evaluate work teams in organizations should focus their efforts on these internal and external factors that support effective team performance.
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!
Last week Major League Baseball was rocked by an incredible story that screamed “Blog About Me!”. Cliff Lee, an 8 year veteran pitcher who’s had the chance to play in Cleveland, Philadelphia, Seattle and Texas, was the most sought after free agent of the off-season. The Rangers, who had his services for a mere 15 starts (plus the post-season) were so enamored with him that they attempted to “break the bank” to keep him in Texas. The Yankees, who have more money than any other team and like to throw that money around, offered him the second most lucrative contract for any pitcher in the history of the league (second only to their other starter, C.C. Sabathia). Lots of other teams had visions of sugarplums as well thinking that they had a chance.
In the end, Cliff Lee shocked everyone and returned to Philadelphia. A “dark horse” that didn’t even show up on the radars of any of the sports writers, Lee accepted LESS money ($50mm less to be exact, from the Yankees) to come back and play with the teammates that he really liked.
“You can definitely sense the fact that these guys step up and are up for a challenge and rise to the occasion and come up big when they need to,” Lee said before the 2009 World Series. “It’s not just one or two guys, it’s everybody. It’s a special team. To win the World Series (in 2008) and be back just proves that fact. There’s a lot of confidence here. Everyone expects to be successful.”
His former (and now current) teammate Raul Ibanez did a nice job of reinforcing what Lee was saying:
“We have a bunch of guys who are not concerned with getting attention,” Ibanez said. “They just want to win and they don’t care if they get the credit for it. It’s amazing what you can accomplish when you have that mind-set, and that’s not by accident.
No one doubts that Cliff Lee is a special, special talent. What else can you deduce when a single guy shows up and changes a team’s entire track record? Some examples:
- In 2008 Cliff arrives in Philadelphia and they win their first Championship since 1983. They returned to the World Series in 2009.
- In 2010, after a mid-season trade, he arrives in Arlington and helps the Rangers reach their first World Series in Team History.
What can you learn from Cliff Lee, Philadelphia, Baseball and the Yankees? Culture really does make a difference. Below, I’ve included a video (one of many) that were created by people who LOVE this guy and are so excited to have him back in Philly – quite a different story from a place like NYC where the money’s great but the egos are huge, the spotlight is brighter and the pressure is exponentially stronger.
One other thought: Jack Daly shared with me that people who make a Career Change typically regret their decision twice in the first 30 days of being in the new role. If you had someone great who left your organization recently for more money or for more spotlight, you might consider calling them and taking them to lunch just to catch up. You just might be surprised how many times the grass wasn’t greener for them on the other side of the fence and, with just a bit of urging, they’d happily come back.
Author’s Note: The song that accompanies this video is explicit – and I’m not going to apologize.
Derek Jeter is one of the most well-known and well-respected players in all of Major League Baseball. This year, at the age of 36, his contract is up for renewal. As the Captain of the Yankees, many fans expected the Front Office to give him whatever he wanted so that he could finish out his Hall of Fame career in pinstripes.
But there’s a fly in the ointment: the Front Office does want to keep Jeter but Derek’s Agent is suggesting that he be paid $23-25mm per year for the next 5 years. His agent has said that Jeter can’t be valued the same way as other shortstops because of his leadership qualities. Why is that a problem?
- A Player is “in their prime” between the ages of 29-32. They’ve got more maturity, they understand how to keep their bodies healthy through 162+ games and they have enough youth still in them to match up against the strength of a 25 year old.
- There are only a handful of players making over $20mm per year – the list gets even smaller when you add the filter of being 36 years old or older. Oh, and the stats of Derek don’t come close to matching those of the players who are at this altitude.
- The 2nd highest paid shortstop in the Major Leagues is Hanley Ramirez who is 10 years younger, hit 30 points higher and hit 21 home runs to Jeter’s 10.
How does this situation possibly impact you?
More and more I’m seeing Business Leaders who are making what I believe to be a major mistake: they’re hiring people who are currently unemployed and offering them significantly less than what they were previously making. They Leaders are feeling quite proud of themselves because people are accepting the positions. Karl Scheible is a close friend of mine and a Sales Guru. For years he’s pounded into my head that people make decisions for 2 reasons:
- To run TOWARDS pleasure
- To run AWAY from pain
The pain of unemployment is more prevalent than the pleasure of waiting for the perfect role for many people today. Here my words of caution to the people hiring the unemployed at drastically reduced rates from 12, 18 or 24 months ago: THEY WON’T STICK. Why? Because people place a perceived value on themselves that is based on both reality (their top pay throughout their career) and their distorted sense of what they think the market should pay them. As an employer, if you’re not within 10% of what they have previously earned, I don’t think they’re going to hang around because we live in a hedonic society that encourages us to live beyond our means. If that new employee is accepting a 20% pay cut, it’s unlikely they’re going to be able to reduce their lifestyle costs by that same amount. They’ll live in pain and will want to run away from it the second they believe the economy has turned around or someone calls them and offers them even $1,000 more per year to change jobs. Don’t believe me? Check out this survey that was conducted 14 months ago (and the trend is going up). It suggests that 67% of people will look for a new position as soon as they think the market shows interest in their skills.
Bottom Line: While you may think that someone is only worth $X, if that person has earned $Y before and takes your job, expect them to be gone within 18 months or less.
A couple of weeks ago I challenged you, as a Business Leader, to evaluate if your company was “In Demand” through the example of Supply & Demand that you learned in ECO 101. This week, I’m shamelessly poaching a short post that I saw on Daniel Pink’s website that takes the discussion of DEMAND to an entirely new level.
Before I share, here’s the definition of Microeconomics from Wikipedia:
In contrast to macroeconomics (which involves the “sum total of economic activity”), microeconomics is a branch of economics that studies how the individual parts of the economy, the household and the firms, make decisions to allocate limited resources.
Put more simply, Microeconomics is “the little things”. From my experience, it’s these little things that make all the difference with regards to both attracting and then retaining talent.
Here’s what I found on Daniel’s blog [it's a write in nomination from a reader from Louisville]:
“I know from your blog that you like signs, so I’m attaching the photo of a sign I saw at our local zoo this past weekend. It is not emotionally intelligent, but it certainly illustrates extreme extrinsic motivation. It seems this construction company feels that company swag is exactly the kind of thing that will motivate employees to stay safe. I can hear the employees now, ‘Well I was going to carelessly wave this nail gun around for a while, but I’ve got my eye on that windbreaker.’ “
People make decisions to either (a) Run Away from Pain or (b) Run Towards Pleasure.
How are you allocating your limited resources to influence the decisions that people are making about whether to take a job or stay in that job on your team?
At the suggestion of Kristen Doyle, our Director of Strategic Marketing, I’m going to begin occasionally sharing some Top 5 Lists of great blog posts that I have read around certain areas of Recruiting and Retention that I believe will have a huge impact on you as a Leader.
With so much in the news today about worker productivity and its impact on the US and global economy, Motivation seemed like a very logical place to start. Add to it, the last 3 CEO’s that I’ve spoken with all listed “Self-Motivated” as one of the most important traits that someone possess to be successful at their company.
What do you think about these? Have I missed any? Please comment or send me an @Reply on Twitter so that your fellow readers can benefit as well.
- Animated Video about Motivation 3.0 – a few months ago, Henry Sauer of Rackspace sent me a copy of Pink’s new book DRiVE and when I read that cash bonuses have the same impact on the brain as cocaine, I started to really pay attention. If you’re not into reading books, this 10 minute video is a great summary.
- If You Want Performance, Give Intent – Simon Sinek has been talking about Purpose-driven organizations and the impact it has on motivation and productivity. This post shares a military story about trust and accountability that will really cause you to think.
- Dave Kurlan’s 5 Ways to Motivate Salespeople – from encouragement to demands, this one’s short but powerful.
- The Significance of Purpose – A short blog post that references a much longer study completed at Wharton that confirms just how powerful a purpose motive actually is.
- Zappos CEO’s Letter to His Team – his open, honest answers to all of the questions that the employees were asking of each other are a great example of how you should communicate to encourage productivity as opposed to the alternatives.