Wise People Decisions- Hiring, Promotions, Terminations

In this article, I am going to lay out all the best practices that you will need to make wise people decisions which includes hiring, promotions and terminations.

It is important to understand the difficulties in something this important, so that we can dedicate the right amount of time and follow the best practices with the appropriate rigor.

Importance of Hiring Decisions in Business Success

Hiring decisions are the most important thing within a leader’s control to their success.

“We spend 1% of our time hiring. We spend 80% of our time making up for poor hiring decisions.”- Jack Welch

Most of us aren’t very good at making people decisions, Peter Drucker estimated that:

1/3 of our decisions are effective
1/3 of our decisions are minimally effective, but not ideal
1/3 of our decisions are failures

Decide right now to spend more time on hiring. Do not make hasty decisions. Wait, be more choosy. You will find a whole new level of success from that simple change.

Difficulty of Assessing Candidates

Hiring is an incredibly important part of a leader’s job. However, it is something that is difficult to do really well. Why? We are going to explore many reasons.

First, there are few exceptional performers,so you are statistically much more likely to hire an average performer. If we want to hire top 10% candidates, and we are 90% accurate in our assessment of candidates, we will hire the top 10% candidates that we aspire to hire about 50% of the time.

Why?

Out of 100 candidates, 10 are those top 10% candidates.
We would correctly identify 9 of the 10 as top candidates.
Of the 90 other candidates, we would incorrectly identify 9 of them as top candidates.
9 correct and 9 incorrect equals 50%

In addition:

Each job has unique aspects that are required to ensure success. It takes deep reflection and study to really tease out what those requirements must be.

Plus, the world, company, industry etc. are continually changing and, therefore, changing aspects of each job. Customer and management expectations change continually, as well.

Therefore, we must predict two things:

What skills and attributes are needed?
Will each candidate deliver on those needs?

Since jobs change rapidly, we must anticipate changes. While we cannot necessarily anticipate what changes will be ahead, we can strive to hire those that are flexible learners able to deal with whatever changes occur.

Best case, each candidate will have the following characteristics:

Soft Skills / Emotional Intelligence, which is made up of the following four components:

1) Self Awareness- The key question is how well do they really know themself and how that impacts the way they interact with the world.

2) Self Management- Can they use their self knowledge to create good outcomes for themselves and others? For instance, can they use self discipline to overcome a propensity to procrastinate on a disliked task?

3) Relationship Awareness- Can your candidate tell how the people around them feel and are reacting to what is happening? For example, I am giving a speech, and can I see whether the audience understands the material or not?

4) Relationship Management- Can your candidate use their relationship awareness to improve outcomes? For example, if my audience does not understand my speech, could I slow down and tell additional stories to aid in understanding?

The ability to collaborate effectively with all of the stakeholders for the position.

The ability to be a formal and informal leader on the team.

Limited Accessibility of candidates

Candidates have a low tolerance for hiring evaluations and the time the evaluations take. Therefore, we must use the time they are willing to give us wisely.

The best candidates are not even likely to be looking for a job. Their employers want to keep their best and brightest around, so we must seek them out and find a way to woo them.

Candidates will likely worry that their participation in the evaluation process will be confidential. No one wants to jeopardize stable employment while searching for an “if come” position in the future.

Psychological Biases and Emotional Traps

In addition to all of the issues discussed so far, assessors bring a series of issues to the party. In order to overcome our biases, we must know what they are.

Procrastination
1. We wait for too long to make changes when things are not optimal. You should be careful that each of your employees fits one of three categories. See the article for more details.
2. We are especially poor at succession planning, since it tends to aid us in the future but cost us time today.
  1. You should strive to have multiple candidates being developed for every important role at any time.
  2. For each candidate, we must have a plan to grow them into the role, before the change is required. That insurance will not only future proof the organization, but it is a great investment in the future of each candidate.
Overrating Capability
1. We are horrible self assessors, except when we are depressed.
  1. 96% of executives believe they are in the top 10% of executives.
  2. 94% of professors believe they do above average work.
2. That is important, because we are relying on the description of the candidate by the candidate to assess their ability.
3. We tend to believe that people can change more quickly, and to a greater degree, than they actually can.
4. We incorrectly believe there is a high correlation between the motivation to perform and the actual capacity to do so.
Snap Judgements- We rely far too heavily on first impressions, and incorrectly believe we’re good at “sizing people up”. Snap judgements are based upon unreliable indicators of performance like a candidate’s charisma, which is not critical for many roles.
Branding- Hiring someone because they worked at a company or went to a school that you admire is a piece of evidence. However, it alone does not automatically make someone a good candidate.
Evaluating People in Absolute Terms- We frequently generalize and call someone a “loser” or a “great manager”. That is frequently incorrect. Success is largely caused by context. I once had a leader working for me that was very successful by all measures. The customers loved him and his team, which he built, loved him. However, when I put that same leader in charge of a different team that he didn’t recruit, with a different customer, he was unsuccessful based on both customer feedback and the feedback of the team. The difference: context
Seeking Confirmatory Information- We seek information to confirm our initial impressions, and block ourselves from things that may invalidate our initial impression. That is very dangerous.
Saving Face- We cover up bad hiring decisions to protect our ego. Instead of dealing with the issue immediately, we frequently double down on bad decisions instead of cutting bait.
Sticking with the Familiar- “Good Fit” can be code for “the same”. This can lead to myopia, which is dangerous when change is needed. Diversity is powerful for a team, so we should recruit for it. The one exception from that rule is any deviation from the core values of the organization.
Emotional Anchoring
1. Judging candidates relative to someone familiar. Just because the candidate has similar mannerisms to the aunt that you do not like, it does not mean they are not a great candidate.
2. We remember the first and last candidates most vividly. Given that place in a selection process is not a reliable indicator of success in a position,
Herding- The safest place in a herd is in the middle. Therefore, we go along with the group’s opinion. No one wants to be looked at as a poor team player or lazy. When we herd, we imitate others, instead of bringing our art and unique perspective to the task.

Perverse Incentives and Conflicts of Interest

Candidates who need a job can make poor assessments of their fit. They want the job, so they tell you what is necessary to get it. It is your job to see past it.

We are risk averse when things are going well, and embrace risk when we are in trouble. Neither is the optimal way to make great decisions. Instead, we should make a timeless commitment to being decisive and wise about personnel decisions.

Political Pressures

People like to hire friends. However, friends are not always the strongest candidates.

Insecure leaders will sometimes advocate a weak candidate to stabilize their power. I worked with a leader that filled her department with weak people. It made her the center of the department, but, at the same time, the department was weak. Her successor changed the complexion of the department, by recruiting strong performers with strong views. The performance of the department skyrocketed.

Knowing When to Make a Change

We are slow to act, when things are going poorly.

We are even slower to act, when things are going well. Hence, the old saying: “If it ain’t broke, don’t fix it.”

Remember: “Leaders relentlessly upgrade their team using every encounter as an opportunity to evaluate, coach, and build self confidence.”- Jack Welch

It is important to understand the difficulties in something this important, so that we can dedicate the right amount of time and follow the best practices with the appropriate rigor.

Knowing What You Want / Need for a Position (Hiring or Promotion)

If we are going to hire/promote the right people, we must have a crystal clear view of who we are looking to bring on our team. Here are some things to consider while you decide what characteristics are needed / desired.

First, you must hire people that share your company values. While you can develop some values in some people sometimes, you should never compromise on values in hiring.

As the old saying goes; “You can teach a turkey to climb a tree, but it’s a lot easier to hire a squirrel.”

It is a best practice to look to hire internal candidates first. It is so important to create a culture of growth in your employee community.

While you will need unique criteria required for each position on your team. There will always be some classic tradeoffs between emotional intelligence, experience and intelligence (IQ). Here is how I would think about it.

Experience counts a lot, but it is not enough by itself.
IQ is the most important factor, when someone doesn’t have experience.
IQ alone is not enough of a predictor of success.
You get hired on experience and fired on personality.
Emotional intelligence correlates higher to success than intelligence.
Lack of emotional intelligence is highly correlated to failure.

Given that advice, what is this thing called emotional intelligence?

It is the classic “soft skills”, which is made up of the following four components:

1) Self Awareness- The key question is how well do they really know themself and how that impacts the way they interact with the world.

3) Relationship Awareness- Can your candidate tell how the people around them feel and are reacting to what is happening? For example, I am giving a speech, and I can see whether the audience understands the material or not.

4) Relationship Management- Can your candidate use their relationship awareness to improve outcomes? For example, if my audience does not understand my speech, I slow down and tell additional stories to aid in understanding.

The most powerful combination is relevant experience and emotional intelligence.
IQ can be complemented by emotional intelligence, when experience is not possible.
Emotional Intelligence must be present for success.

Hire to foster diversity on your team. The only form of diversity that may be unwanted is the types of employees that do not share the company’s core values. Other than that, look for every form of diversity that you can get: racial, gender, thought, experience, skills, mindset etc.

You should look to hire people who thrive with your leadership style.

What is your leadership style?
How would you describe it?
How will you assess for a match?

Create a series of specific detailed priorities.

To do that, ask yourself:

Two years from now, how will we tell whether the new employee has been successful?
What do we expect them to do, and how will they do it?
What are the initial objectives?
If we were to implement an incentive system for this position, what key variables would matter most?
Be as clear as possible

Create a list of critical incidents

These are commonly encountered situations that must be mastered in order to be a strong performer.

For example,

Will they have to take a complaint from a frustrated customer?
Will they have to give high pressure presentations?

You must define your critical incidents as clearly as possible.

Success / growth potential

Every candidate should be hired to succeed you someday.

Decide now; How will you assess them for that?

Process

Take the list of things that you are looking for developed with the tips so far. It is time to put some structure around a process from here on out:

Identify the stakeholders for the position (management, peers, direct reports, customers / suppliers)

Hold a brainstorming session to define the Who, the What and the “Ticket” for this position:

The who is made up of:

The organization’s core values
The attitudes necessary to be successful in the position
The behaviors that a thriving person in this role would exhibit.
The traits they would have.
The characteristics they would possess.

First, simply capture words and phrases….

Then, go back and clearly define them.

“90% of mis-hires come from a mis-match in values/culture/behaviors”- Bob Spence

The what is made up of what the ideal candidate will be doing:

Brainstorm all of the specific duties and responsibilities.

Next… clarify each one

Finally… add specific expectations and performance criteria (metrics, SMART goals).

The ticket is made up of the education, experience and skill sets needed or wanted.

First, Brainstorm:

Education
Experiences
Skill Sets

Then, clarify each one to be very specific.

Finally, decide which ones are:

Required; a resume should be thrown out if it does not indicate that it is present.
Preferred; a resume goes to the top of the pile if it is present.
Desired; it will be used in a tie breaker between two amazing candidates.

Be sure to list the top three challenges / priorities for the position at the top of the job description or ad.

Be clear
Be brief

Must Haves In Hiring / Promotions for Leadership Positions

If hiring is incredibly important to the success of every organization, it is even more important to pay special attention to those that you put in leadership positions. To that end, I thought that I would give my list of special considerations that you should be looking for when hiring for leadership::

A leader must have the right motives. Prestige nor money constitute good reasons for being a leader. They tend to be outcomes of getting into leadership positions. You should be looking for people that feel that their leadership can generate positive Impact on their employees, the company and all other stakeholders.
A leader must be able to make sense of ideas and discover new ideas.
A leader must be able to communicate a compelling vision that appeals to both emotion and logic of potential followers.
Leaders must have the grit to drive towards goals, despite setbacks. Grit is a combination of perseverance and a clear long term north star of where they are headed.
Great leaders seek out learning opportunities for themself and for their team members. In order to make positive change, you must know what is happening in your company, your industry and the world. Plus, you must have a broad breadth of knowledge in order to effectively innovate. “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”- Steve Jobs
They must have a clear vision of themselves as a leader. How will the group look different with you at the helm? What will you delegate? What will you ensure that you do personally? Etc.
They must possess an orientation that is relentlessly focused on improving the results of the business.
A team orientation permits leaders to focus, align and build effective groups.
They must be effective in working with, collaborating with and influencing those that are not in their chain of command.
A strategic orientation enables leaders to think beyond the issues of the day, and beyond their sphere of responsibility.
The ability to give effective change leadership allows them to transform and realign whenever necessary. In many ways, all leadership is “change leadership”.
A great leader focuses on and is good at developing organizational capability. That is the training, feedback, coaching and mentoring necessary to develop the capabilities of others.

If you’ve done it right to this point, you will have described a superhero based on all of the wants and needs so far. That is good. However, do not make the mistake of assuming that you will get everything that you have listed. Therefore, you must prioritize. Prioritize competencies that are in short supply on your team.

Use the techniques to describe the candidate that you are looking to find, and your search will be much more likely to give you world class results.

Where and How to Look

It is time to look toward where and how we should look. Here are some solid recommendations to add to your arsenal of posting the position on your website, job board (Monster, Indeed etc.) to gather resumes:

It is best to consider both internal and external candidates, wherever possible. All internal applicants for a job should be interviewed. It is a fantastic opportunity for organizational development. Even if an internal candidate does not get the job, it is an opportunity to give them feedback about that career path in the future.
Just to set things off on the right foot, let’s get our mind right. The best advice is to look at 20 candidates for a position, before making your selection. This is a time to be comprehensive.
The use of personal contacts results in better placements. However, be careful that your assessments are as thorough for personal contacts. Use LinkedIn to search for potential candidates and enlist the help of your fellow team mates.
Be thoughtful about maintaining your professional network to help you with sourcing. Do not wait until you need them to reach out to your network.

Assessing Candidates

First, it is time to get our head right. This is a task where we must bring our greatest wisdom to the table and practice rock solid judgement. Just as importantly, we must guard against making a snap judgement.

We will discuss four primary tools for doing your assessment.

Structured Questionnaire
Resume
Interview
Reference Checks
A few other tools

Be sure that your ad is designed to attract the right applicants. That means that you should state things in plain and simple english and put the most important criteria right up top.

A structured questionnaire based on the job requirements where you ask the candidate behavior based questions regarding the most important qualifications required for success in the job is a great augmentation to the use of resumes. You simply devise the questionnaire and ask for applicants to respond to the open ended questions when they submit their resume. Then, you use the quality of the answers to augment the resume screening to avoid wasting the time of any unqualified candidate or yourself.

Resumes are a time tested way to begin the assessment process. They are a decent way to get a hint regarding whether a candidate has the relevant experience and education. My advice regarding screening resumes is to prioritize it. That means getting yourself in a position where you can give it 100% of your focus. I would also recommend that you be inclusive and not exclusive. Resumes should be put to the side when it is clear that they do not have the experience required. However, this is the beginning of the process, so you need not throw out every marginal candidate.

Perform an internet search for any resumes that make it through screening on Google, Facebook, LinkedIn etc. Do their posts show someone with your corporate values?

Interviewing is the best assessment tool available to us.

One important tool in promoting the right people or selecting great team members is behavior based interviewing.

How do you go about conducting a behavior based interview?

Before the Interview:

Develop a list of questions about specific examples in the past where the candidate dealt with situations similar to the ones likely to be encountered if they get the job.

At the beginning of the Interview:

It is important to minimize the fear of the candidate. You want to see them as the person they will be on a typical day at work, and not, necessarily as the nervous person showing up to the interview. Therefore, take the time to establish rapport with the candidate to make you more human. For example, you might look for things that you have in common and have a short conversation about them. You should also let them know the structure of the interview to remove the fear of the unknown.

During the Interview:

Ask each of your questions. You need not necessarily ask them in the order listed, but you must make certain that each candidate answers each question. If they answer question number 10 in their answer to question number 2, there is no need to ask question 10 again.

Ask the same questions of each candidate. In order to objectively compare candidates, you must have the same evidence for each.

You are looking for specific examples (names, dates, amounts, what was their role etc.) If they speak in generalities, pin the candidate down to specific examples. Keep digging until you get to the specifics.

It is your job in an interview to listen. Listen very carefully to ensure that you thoroughly understand the answers, including their nonverbals / body language. Any time that you are not certain that you understand the answer, ask follow up questions until you are confident that you understand.

Take fairly detailed notes about the answer to each question. Our memories bias toward the first candidate and the last candidate. Since we generally schedule for convenience and not for relative merit, those memory biases are a problem. To overcome them, you can use your notes to ensure that you remember all of the candidates thoroughly.

When you start to form a judgement during the interview, either negative or positive, you should ask questions designed to disconfirm your judgement. Look for contrary evidence in their answers and behavior.

I was once in an interview, where the lead interviewer asked one question at the beginning of the interview and the candidate talked for the entire balance of the scheduled time. Remember, you have a specific mission. It is to get the answer to every one of your questions. In order to maintain control of an interview with a chatty candidate, ask redirecting questions to keep moving through all the ground that you need to cover.

Allow time (5 or 10 minutes) for them to ask questions of you at the end of the interview. The quality of the questions that they ask should be part of your evidence regarding the merit of each candidate.

After the Interview: Evaluate each candidate shortly after the interview using your notes. At that time, add to your notes and clarify what you wrote.

Selecting Fellow Interviewers

Each should be familiar with the range of experiences / competencies for the position.
They must be skilled in their ability to decode nonverbal behavior.
They must have rock solid listening skills.
They must have the motivation to conduct a sound appraisal vs. rushing to fill the position.

How many interviews should be conducted? 3 is optimal.

More and you are likely to, unnecessarily, disqualify qualified candidates.
Fewer and you are likely to allow poor candidates through the process.

Other best practices in interviewing:

Utilize only qualified assessors that have been trained in the best techniques.
Interviews should be conducted sequentially. Three people in a single interview is not equivalent to three interviews.
Interview Independently in two person teams. One person should worry about conducting the interview, and the other should be observing and listening carefully to pick up details.
Disciplined team interviews can be useful where you have many people that would like to contribute in the process. Just ensure that each person is clear on what questions they will ask, and in what order. Hold the expensive team Interviews until after individual or two person screenings.

Use this excellent interviewing style and the quality of your hiring and promotions will go up dramatically.

Checking references

It is absolutely essential in any assessment to check references.

Listen to the references that the candidate provides to you with a grain of salt, and do not limit yourself to the references provided.

Consult the collective opinion of colleagues in the same industry. Generally, you can learn a lot about a candidate based on their reputation.

The basics of reference checking are to check:

The accuracy of the educational background they provided.
Confirm the employment dates of the jobs they listed.
Ensure that a thorough background check is done.
Ensure that self reported achievements are real.

However, we want to use this valuable resource to go much further. In our reference check, lets:

Ask behavior based questions of the references
Hone in on their competence and potential
Be wise when deciding whom to call for reference checks and make sure that each stakeholder group is represented i.e. former bosses, colleagues and direct reports, if applicable.
Keep your list of questions short. The reference is doing you a big favor, so be wise with their time and cooperation.

Call a former boss to learn about things like:

Results Orientation
Strategic Orientation
Commercial Orientation

Call a former peer to learn about their ability to:

Collaborate
Influence

Call a former direct report, if applicable, to find out about their ability to:

Lead
Coach and develop their employees

What to ask during a reference check:

Confirm the relationship between the reference and the candidate
Have they observed them in the situations of interest to your position?
What did they do specifically?
How were the results achieved?
Look for evidence about their level of competence

Other assessment tools that might be valuable in specific circumstances include:

Have them participate in an exercise of teamwork or leadership
Have them perform a test; examples- write a sample of software code, to show their mastery of the use of important software
Sign the candidate up to a contract with a provision to hire after a trial period
Performing the job for a trial period
Perform a short term trial: Example- Doing a “job shadowing” stint to ensure the candidate’s understanding of the requirements of the position.

Selection

Your selection team should be made up of three individuals that are intimately connected to the position and what you are looking for in the ideal candidate. Plus, they must have your respect in the wisdom of their decision making.

Final Selection process

Review the performance expectations thoroughly once again
Review the evidence gathered for each competency required for each candidate
Review / project the candidate’s potential for growth
Balance rationality with your intuition

Ask yourself some important questions:

Would I want this person to be my boss?
Would I learn significantly from them?
Would I worry if they went to a competitor?

The special case of internal candidates:

If hired; you should work with them and their previous manager on a transition plan.

If rejected; you should give them:

A gap analysis that explains why they did not get the position.
Recommendations about how they could improve their chances to get a similar position in the future. This is a great employee development tool.

Use these tips to assess your candidates and your rate of hiring success will skyrocket.

Use these techniques to increase your odds of success in filling your team full of star performers.

Just my opinion. What do you think? Let me know in the comments.

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