Hiring Mistakes

Why do so many hiring and promotion decisions turn out badly?

Decisions are sometimes made without the benefit of good information:

Application and resume data may be inaccurate or inflated.
Past employers may not provide a complete and candid reference.
Some candidates outpeform in interviews and underperform on the job.
Interviewers may fail to uncover critical information relevant to job success.
Past performance does not always predict suitability for and success in a new role. For example, top salespeople don't always succeed as managers.
The factors creating the success of incumbents may not be well understood.

The "deck is stacked" against the hiring manager:

Studies show that at more than half of resumes and job applications may contain false information and spikes in the amount of false information correlate to economic downturns..
A survey of 2,500 recruiters in the U.S. and Canada by ResumeDoctor.com showed that "lying and misleading, especially in terms of education, dates and inflated titles" was among the top twenty "pet peeves" of those surveyed.
The value of reference checks is variable. The former employer's policies may limit the amount of information available. Obtaining an accurate report of prior performance can be difficult.
A study by the Society for Human Resource Management found that 63% of all hiring decisions are made during the first 4.3 minutes of an interview. Does that sound like the proper process?
"Chances are good that up to 66% of a company's hiring decisions will prove to be mistakes in the first twelve months of employment." Peter Drucker.

The consequences of a hiring or promotion mistake tend to be anything but trivial:

Any new hire who performs below the existing average serves to weaken your company. To improve your organization, each person added must be better than the existing average.
A weak performer will be a drag on the organization, perhaps over a long period of time unless they are coached to a higher level of performance or terminated.
In either case, momentum is lost until the problem is corrected.
Turnover cost estimates range from a few thousand dollars to replace an entry level employee, up to more than a year's salary for higher level positions.
The legal doctrine of negligent hiring seeks to hold employers liable for the criminal or tortious actions of their employees, even while "off the clock." Employers need to be able to document the steps they are taking to screen out such potential offenders.

Why some managers almost always hire top performers:

They act upon better and more complete information by using all the available resources:

Resume and application examined for inconsistencies.
Personal Reference checks
Criminial Background checks
Integrity assessments used to gauge integrity, attitudes about substance abuse in the workplace, attitudes about reliability and work ethic.
Drug screening
Personality / Behavior assessments to reveal likely on the job behavior.
Abilities assessment to understand their learning and thinking capabilities.
Occupational interest assessments
Job Matching System to compare the total person to a target profile
Structured interviews to get to the key issues.

The chart below illustrates how the cumulative effect of multiple sources of information and cross-checking can increase your chances of hiring a top performer.

Sources: Professor Mike Smith, University of Manchester, August 1994.
John E. Hunter and Ronda F. Hunter, Validity and Utility of Alternative Predictors
of Job Performance, Psychological Bulletin, Vol. 96, No. 1, 1984, p. 90
Robert P. Tett, Douglas N. Jackson, and Mitchell Rothstein, Personality
Measures as Predictors of Job Performance: A Meta-Analytical Review,
Personnel Psychology, Winter 1991, p.703. Michigan State University School of Business.

To learn more about how Pace Solutions may be able to help you achieve your business goals, give us a call at 904-213-0829 for a free consultation or send an email.

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