Organizations of every size face challenges selecting the best people during talent acquisition. Sometimes there is a gross misalignment between employees’ skills or expectations and the actual role requirements. Other times, candidates with apparently strong track records just don’t work out. They may have been successful in a similar role or in the same industry, but they just can’t seem to be successful here.
The cost of underperformance is enormous. In more than 100 hiring programs evaluated during the past five years in SHL’s “Business Outcomes Study Reports,” the business impact of having employees with the right competencies and skills for the job vs. those who are a poorer fit is typically additional sales, increased output and reduced turnover costs per high performer – often millions of dollars in revenue across the workforce.
Similarly, in the case of internal talent mobility, companies often struggle to retain ambitious high performers, promoting or transitioning them into new roles where sometimes they are much less effective. This phenomenon was described more than 40 years ago by Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle: Why Things Always Go Wrong. Briefly: “In a hierarchy, every employee tends to rise to his level of incompetence.” It’s a cynical worldview, but most managers could name names.
These challenges persist because it can seem easier to hire by instinct, or to use simple but unstructured processes, or to simply choose people who seem to have the right experience. But the costs of poor talent decisions and underperformance outweigh these perceived benefits. Employers can do better. With the cumulative wisdom and toolkit of industrial-organizational psychology, the science of people at work, organizations can measure talent – candidates’ potential, readiness and fit – and match people to roles and organizations where they will be successful.
The Right Person for the Job
Identifying the people who are more likely to succeed at a given job is a well-proven science with a 100-year heritage. The key is to hire based on what the job requires. While this seems obvious, organizations often struggle to clearly and objectively define job requirements, or they may have difficulty translating broad role expectations – “provide excellent service to new and existing customers” – from a job description into behaviors that can be measured in the hiring process. Designing effective hiring processes starts with a formal, objective accounting of job requirements, elicited from a representative sample of subject-matter experts who know the job requirements well, such as high-performing incumbents, managers or trainers.
Job analysis can be relatively quick and painless, such as an online survey of a representative sample of job experts, incumbents or managers, for example, when studying jobs that are common across organizations, well-understood from previous research, and that don’t change much over time. Front-line manager or customer service assistant could fall into this category, as these jobs often involve similar elements such as coaching and supervising a team, and being friendly and service-oriented, respectively.
The job analysis process also can be detailed, involving onsite job shadowing by analysts, detailed focus groups and interviews, which makes more sense for unique jobs, new or changing roles, or situations where involving stakeholders to this degree makes the effort worthwhile, such as union environments or large-scale change management initiatives. Job analysis is also flexible enough to consider what the job requires today and what will be required in the future, if this is an important hiring consideration.
In general, the resulting job requirements generally fall into three categories:
What people need to be able to do on day one to be minimally successful.
What the performance requirements are for acceptable and exceptional performance.
What the working conditions are and what it is like to work there.
Once the job is understood, the recipe for designing a scientific hiring system is simple:
1. Identify the people requirements – what attributes make people succeed or fail in the role.
2. Determine which requirements the organization intends to select for versus those it will seek to develop in new hires via on-boarding and on-the-job training.
3. Build a formal assessment program to measure potential talent.
4. Assess who shows up and try to hire the best.
This can be easier said than done. Identifying people requirements is difficult; scientists have been studying this for a century and are still developing the answers. Moving from job tasks and accountabilities and company culture to tests and interviews that provide good predictive information, requires a deep understanding of previous research on job performance prediction, methodologies to reliably develop new instruments and exercises that perform as expected, and a careful, objective approach throughout to question assumptions and ensure quality. In short, to determine what exactly should be measured in candidates, organizations need the science of talent measurement. But one need not be a scientist to make some sense of a market saturated with various employment tests, traits, models and labels – just remember P = M x Q.
Motivation Multiplied by Qualification
A common belief is performance is determined by motivation multiplied by ability, or P = M x A. This formula is useful to help talent managers remember that success depends on people being able to do and wanting to do a job. However, the “ability” label could give the mistaken impression that being smart and sufficiently motivated is all that is needed to succeed at work. It’s not.
Research across several decades makes it clear that other competencies beyond problem-solving and learning ability also predict success in most jobs, including personality traits such as conscientiousness, agreeableness and extroversion. Interpersonal skills, managing oneself toward goals, following rules and procedures, demonstrating creativity and a host of other soft skills or competencies are useful – often essential – for success at work. As jobs increase in complexity, a more holistic view of what ability means is needed to fit the evidence.
What about experience, the favorite of recruiters and hiring managers alike? Beyond competencies and ability, there is clear evidence that experience matters, just not the way it is usually measured. Science doesn’t measure experience simply as time in a job or years in the industry. Although these widely used measures are easy to collect and straightforward to review and confirm, they don’t predict job performance. Rather, experience is best measured as the result of these efforts – specifically one’s knowledge, skills and judgment.
It is hard to imagine an accountant, software developer or industrial-organizational psychologist could be successful in his or her job without acquiring the requisite technical knowledge of these respective professions along with the skill and judgment to apply that knowledge effectively. By defining experience as the resulting knowledge, skills and judgment, employers now can accurately measure these accomplishments using standardized tests or performance exercises.
Interestingly, while one’s cognitive ability does predict learning speed, time on task and focused practice seem to predict expertise in a given domain. Like the fable of the tortoise and the hare, although somebody smart is likely to pick up concepts more quickly, people who persist, learn from failure and adapt, and keep working to develop their skills over thousands of hours ultimately become experts.
Qualification may be more useful for the formula alongside motivation, referring to the combined set of abilities, competencies, knowledge, skills and judgment that a person brings to the job. So instead of P = M x A, more accurate is P = M x Q. Qualification also implies that these are not generic attributes applicable in every setting. Qualification is talent as viewed through the lens of a job role or set of performance requirements. It is oriented to improve talent decisions and organizational performance.
The Right Job for the Person
People’s motivation at work is a combination of factors that broadly impact how they approach work in general, as well as factors that affect how they respond to working for a particular organization. The general characteristics that motivate people are things such as their achievement orientation – how important are accomplishments and self-improvement – and their persistence or resilience – how they deal with failure or setbacks. People vary on these characteristics, and the characteristics can be reliably measured through tests, interviews and simulations. Adding these measures on top of the qualifications measures of abilities, competencies, skills, knowledge and judgment improves prediction of on-the-job performance.
The other part of motivation is a bit more complex because it results from interplay between personal characteristics, the job requirements and organizational culture. This situational motivation is based on people’s work interests and values and how well they match the situation they find themselves in. In the case of interests, based on what people like to spend their time on and the types of tasks they enjoy at work, if they get to do these things on the job they will be more intrinsically motivated and perceived as having a better job fit. The other part is their work values, and the relative priority people place on things such as autonomy, supervision, accountability, fairness or competitiveness at work.
These work values can be enumerated, defined and reliably measured through assessments. When people’s work values match up well with the organization’s way of working and the company culture, people are more likely to be motivated and labeled a culture fit, which can improve retention.
Both of these situational motivations, based on people’s interests and values, can change based on people’s experience or perceptions of the work environment. Projects change, leaders change, cultures change. Or sometimes, people just perceive things have changed. For example, they hear news or gossip about how a co-worker was treated, and even though their personal experience with the organization did not directly change, they come to feel differently and perceive the organization to be less of a fit. This is referred to as engagement.
Employers can dramatically improve their decision success rate by clearly identifying what is needed for success in a given role, and then objectively measuring candidates’ qualifications. To maintain a motivated or engaged workforce, they should seek to hire motivated and resilient people from the outset, then work to ensure candidate interests and values align with the work environment and organizational culture. This alignment can be accomplished in the selection process, through job- and culture-fit assessments and by providing accurate information during recruitment and in employer-branding processes.