Cognipsy - Blog #talent

Why do new hires fail?

Wed, 11 Nov 2020 13:21:42 +0530

According to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of the employee's first-year earnings. Another study pegs this cost at USD 15000 per wrong hire. While most hiring managers agree that wrong hires are costly and draining on organizational resources and morale, there is little agreement about why this happens?

We all can agree that no hiring manager or recruiter would hire a new employee only to set them up to fail. Yet, new hires do fail and often in spite of remedial strategies. A common reason for this is that often role requirements are not clear and at other times there is too much focus on skills that can be acquired with time. What many hiring managers fail to recognise is that there are some fundamental tendencies that are hard to fix or acquired due to sheer individuality of people.

SPS Scan identifies 5 clusters of reasons why people fail at jobs and struggle to remedy or learn key behaviours. These behaviours are so fundamental that in the short term they are hard to imbibe often because they come with their well entrenched belief systems which are hard to change. Let's take a quick look at these fie clusters.

1: Antagonism - Pattern of behaviours that antagonise others - Burning bridges and inability to sustain relationships.

Antagonism is a common cause for non-performance in roles requiring social mediation, customer service, account management, teaching/training, helping and care-giving. Antagonism has strong negative relationships with Agreeableness and Conscientiousness.

2: Detachment - Pattern of behaviours that lead to isolation - Inability to socialise with others and create favourable social reputation.

Detachment is a common caruse for non-performance into roles requiring frequent social interaction, information sharing, initiating contacts, speaking publicly and asserting self over others. Detachment has strong negative relationships with Extraversion and Emotional stability.

3: Inhibition - Pattern of behaviours that inhibit appropriate actions - Inability to start tasks and maintain goals.

Inhibition is a common cause of non-performance in roles requiring responsiveness, being busy, doing a large volume of work, stressful timelines and energy/endurance. Inhibition has strong negative relationship with Emotional Stability, moderate positive relationship with conscientiousness and moderate negative relationship with Extraversion.

4: Disinhibition - Pattern of behaviours that exhibit inappropriate actions - Inability to exercise caution and deliberation in taking prudent actions.

Disinhibition is a common cause for non-performance in roles requiring high stakes risk, procedural action, bigger responsibilities and work which may undergo legal/regulatory scrutiny. Disinhibition has a strong negative relationship with Conscientiousness and moderate positive relationship with Extraversion and Openness.

5: Incomprehension - Pattern of behaviours that impact cognitive efficacy - inability to solve problems and think properly.

Incomprehension is a common cause for non-performance in roles requiring sound judgement, analytical thinking, complex problem solving, dealing with novelty, dealing with ambiguity and decision-making with long term consequences. Incomprehension has strong negative relationship with Openness and Emotional stability.

As expected, our research shows that Disinhibition and Inhibition explain maximum variance in performance at workplace as described in Bartram's great eight framework. Statistically this is a great validation for these constructs. But from a practical stand point it's the granular 30 scales that best describe more specific risks. E.g. Managers who are very high on openness are more likely to have risks in areas like "emotional avoidance" and "self-awareness". This is one of the many reasons why understanding and avoiding wrong hires requires must more granular and data based intelligence.

What's wrong with hiring?

Thu, 29 Oct 2020 18:14:05 +0530

In a world where human resources is trying hard to justify its existence while business quite literally ridicules the people practices, we are often left to introspect about reality. There are two main reasons for this, one, measures of people practices are very subjective (not that they can't be measured) and two, the impact of people practices are not realised immediately and even when realised, this happens very indirectly.

But not all is baseless. One aspect of HR which receives the least criticism and in my view is the least evolved is the hiring function. Addressed as hiring, recruitment or talent acquisition, practices pertaining to the function are in fact the most baseless and unfounded in management science. The measures of hiring function on the other hand are much more objective and can be measured with much more accuracy in a short frame of time.

Lack of Strategic Principles

Would you hire any different if you were to work for a competitor?

Ask this question and if your answer is no, well you are definitely not hiring right. But this clarity is a part of a bigger problem i.e. HR function not being strategic enough and/or not connecting to the business. The kind of people a company acquires is a single sustained source of advantage and a single source of loss too (once hired law makes it difficult to rid of a resource). While you may struggle to meet numbers for the right cost and time, without the broader principles in place, hiring may just not deliver what business needs.

Use of Resumes

It isn't uncommon to come across recruiters who would say that a glance at a resume would clearly tell them about the fitness of a candidate. Well thought out lab studies with resume have provided poor results. Resume/CV do not predict performance at work (r = 0.05 - 0.08), even with scientific methodology, let alone intuitive gut feel. Structured form based applications on the other hand are moderately better, yet disappointing (r = 0.12). 78% of resume/cvs have been found to be not simply inaccurate but fraudulent (SHRM study). So ultimately impressive resumes predict impression management, verbosity, some intelligence but neither competence nor performance. Unfortunately, this still persists as a screening process for hiring at almost all levels.

Unscientific Hiring Criteria (GPA, Campus, Credit Check...)

Use of any hiring criteria must be based on sound evidence. Credit checks, GPA, campus of graduation are criteria that have no basis in management science. Credit checks have small prediction value of (r=0.11) for entry level roles and negligible (r=0.05) for managerial roles. Similarly, GPA only predicts performance in training and the performance in first year post graduation. Post that GPA has meager correlations with job performance across roles. Campus of graduation and GMAT scores can only predict the income of an individual (r=0.49). However, they have no correlation with performance (r=0.007).

Numerous research papers cite that unstructured interviews are the least effective tools for hiring and many have found them to have negative correlations with long term performance. Similarly work experience in years, beyond three years in a role, doesn't predict performance across levels. In spite of their ineffectiveness in predicting work performance, these criteria are basic requirements for entering most organizations. Professional qualifications, reasoning tests, structured interviewing, personality assessments and/or situational judgment tests are far more predictive of performance and yet used the least.

Unrealised value of Talent

While many say its ok to not get the best talent as long as we get the talent we want, it is a grave mistake. If as a company you are that pays at 70th Percentile in the market, having a talent below 70th Percentile is a bad deal. But how do we know the caliber of talent? No easy answers but a good indicator is the selection ratio. If you have had valid screening and selection mechanisms, you should not settle for hiring one of the three best out of 10 candidates. For mass roles within organization, this should be a golden rule when hiring. Usually hiring teams try to focus on meeting numbers for such roles. Besides, every bit of compromise is costly. Consider the fact that with every ten percentile increase in the caliber of talent, productivity increases exponentially. Employee at 90th percentile is at least seven times as productive as the average employee at 50th percentile.

Taming the Gut Feel

Gut feel in all fairness can only be recommended when you have all candidates who seem to do equally well in all criteria of selection. That is the only possible scenario where hiring decisions based on gut can or should be acceptable. Eventually all gut feel amounts to individual projection biases. Any sustainable talent strategy should steer clear from it, not just when hiring, also while making other people decisions.

Qualified Professionals

One reason why hiring professionals excessively rely on gut feel and unscientific practices is because there are no definitive qualifications for being one. One would assume that all recruiters should at least have basic understanding or personnel or occupational psychology. However this is far from what the market demands out of them. Other skills like behavioural interviewing and observation are also equally scarce. The danger of relying on experience eventually leads to a misplaced sense of what is right and acceptable in hiring.

Misleading Measures

The basic metrics that define hiring should be aggressively measured. While most hiring departments today measure, cost per hire, attrition and average time to hire, more important metrics like base rate (what percentage of screen pool was good enough for successive stages) and hit rate (what percentage of hired candidates were good performers) are rarely tracked.

Hiring right is the pre-requisite for all business both operationally and strategically. While numbers and cost factors are important to support business, the strategic component when ignored can corrode the business slowly. A scientific and proven approach to measurement however is necessary to deliver business impact. Its time to transform both our hiring as well as hiring talent.

References and Suggested Reading:

Credit Check Study

The Blackwell Handbook of Personnel Selection , 1st Edition

Oxford handbook of Personnel Assessment and Selection , Nov, 2012

GMAT study

Do psychometric solutions hinder diversity?

Thu, 29 Oct 2020 18:06:53 +0530

Often we are asked questions, on the positive aspects of use of psychometric assessment. Say a psychometrically profiled role is being filled in by hiring candidates who match that profile, does that mean we end up hiring clones? Would it imply that such differences that contribute to attitudinal diversity are hindered when psychometric rules are used for making selection decision?

The simplest answer is both yes and no.

Yes because, theoretically, if a profile can perfectly describe a role, and if that exact profile is used to select for the role, there are likely to be commonalities between all such people selected by these means. However, assumptions made in this theoretical hypothesis are not well founded.

No because, it is almost impossible to find one profile that perfectly predicts performance in a role. Different people use different strategies to succeed at work. So only few variables would be valuable in differentiating the performance there.

It is also impossible to find people with exactly similar patterns of scores, even on 10 traits the chances of finding the same profile are one in a million!

Any psychometric assessment can not describe 100% of all individual differences. e.g. personality can only explain 16% of difference in performance, there is so much more even beyond measures of error that will cause people to be different even with largely similar scores.

Other levels of constructs like attitudes and values also interact with the profiles.

In summary, the impact of psychometrics on diversity is only a theoretical possibility. In reality or in practice, it is very unlikely if not impossible that psychometric instruments would reduce diversity of an organization. In fact, psychometrics can be effectively used to balance attitudinal diversity. E.g. in a prone to risk team, one would want to add a new member who is very cautious.

5 Leadership sins of First-time Managers

Thu, 29 Oct 2020 18:03:03 +0530

Being a leader is not easy. Besides the scrutiny, you are subjected to performance pressures and above all the need to be accepted as a leader. While a lot goes into making a good leader, this short post discusses what derails even the best of the leaders. The most noticeable nuance of all these 5 derailers is the fact that they are context independent. Irrespective of the context, culture and need of the hour, they will amount to inappropriate and risky behaviours.

Inconsistency

Research speaks volumes on the role consistency of behaviour plays in making a leader successful. The problem is that one strong inconsistent message is enough to ruin what you have worked hard to create. Consistent behaviour makes leaders seem predictable by their followers. This amounts to a feeling of security and faith in the contingent consequence of behaviours exhibited by them. Inconsistent leaders make their teams anxious. Many subordinates might even consider inconsistent leaders to be lacking integrity.

The higher the levels of leadership, higher is the expectation and need for consistency in behaviour. Needless to say extreme situations will demand you to indulge in necessary exceptions. My advice would be to ensure that the team and organization appreciates the fact that this is an exceptional behaviour keeping with the need of the hour and not mere inconsistency.

Sycophancy

It is amazing how need for power both fuels and destroys the need for hunger. As a leader, the last thing you want to do is to be surrounded by sycophants who will almost every time agree to everything that you have to say and caress your power image. Research suggests, that narcissistic leaders are the most likely to patronise sycophants around them. Recent research also suggests that the best and most talented people quit leaders who indulge in sycophancy. It is therefore necessary to encourage others especially those the most junior in your team to challenge you in a healthy manner.

Many a times, leaders appear to be unapproachable and hence subordinates might find them to be closed to newer ideas. In such cases, teams will have tacit need to comply to whatever the leader says. And while you might desire that your team challenges you, they will not. That would lead us to the next derailer, the pair of ears that hear but not listen.

‘I hear them out’ syndrome

I wish I had a penny for every time a manager told me “I do hear them out”. Hearing rarely amounts to understanding. Add a little empathy to hearing and you have listening as the product. Listening provides the rich perspective leaders need. The smallest of cues and the subtlest of hints that enable them to know the true picture. Leaders also need to deal with all kinds of knowledge to be able to make decisions. Specialised knowledge from multiple streams may not always be available with the leaders. Listening in this manner, helps them to learn and improvise. Leaders that know what they are doing and seek opinions only to be liked, do more harm than good. The frequent problem here is the fact that most leaders who are not good at listening, are blind to this weakness.

Performance favouritism

Most leaders exercise some form of favouritism or the other. Most leaders will justify by saying that favouritism based on merit isn’t really favouritism. What leaders reward becomes attitude of the team in the long run. While performance must be rewarded in monetary terms, individual relationships should not reflect performance. When competence is linked with leaders’ affiliation, teams become risk averse, less innovative and competitive while individuals suffer from low self esteem and low morale. Favouritism on any ground leads to the similar problems.

Dwelling in uncertainty

While it is necessary to be immune to ambiguity, it must be noted that followers look up to their leaders for certainty and stability. As a rule, only external environment or the customer must be allowed to increase the ambiguity within system. While leaders must deal with uncertainty, they must not let it thrive. Leaders must be responsible for reducing the uncertainty of the system. This contribution is central to the leader member exchange theory. A leader that reduces ambiguity is seen as competent and respected by the followers. When, uncertainty is necessary depending on situations, leader must reduce the risk and fears of those following them. A typical mark of high performing incompetent leaders is that they off load the risks due to uncertainties to the people under them. Good leaders clearly evaluate the needed uncertainty and hedge their followers against the risks imposed by their decisions.

Many a leaders, due to their innate preferences and personalities seek uncertainty to thrive. A remedial approach would be to allow subordinates to dynamically scope the uncertainties and if possible address them. Such leaders would be benefited by letting their subordinates deal with uncertainties while actively supporting them.

These five sins must be cautioned against independent of industry, context, problem at hand and situation. While the success factors are many, these hygiene issues must be taken care of. These are key to holding people together and winning their respect.

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Why do talent reviews fail?

Thu, 29 Oct 2020 17:56:53 +0530

In a tightly packed conference room executives debate who the next line of leaders are going to be. A number of stories are narrated and a number of documents are churned. What's evident is the process, the discussion and the intense reflection. At the end of the review some decisions are arrived at and the review comes to a close.

While the talent review is a common process and there is little room for diversity of creativity there, success of talent reviews as a part of the talent management process itself is rare. Completion of talent review however is construed as success. That rarely is the case.

So what makes the talent reviews fail? Let's look at the most common derailers of the talent reviews in the corporate:

Conjecture

No matter how many documents are presented in the review, if all of them are manager's estimate or if they are all subjective speculation, talent review is bound to fail. Objective data however difficult must be collected. Common practices are to use a psychometric assessment, 360 degree feedback, behvaioural interview assessment, and performance data depending on roles/KRAs.

In absence of objective data, bias takes over and managers and executives alike tend to favour successful candidates or safe candidates. A clone effect also takes over where in managers who are most like the executives present in the review are favoured and receive positive hearing. A well known fact is that managers are poor judges of individual potential.

Poor Facilitation

All said and done, no culture or company for that matter is perfect and there is always some room for politics and biases. There is little on can do beyond a point. Therefore your best bet is to have an executive or better still an expert process facilitator do the job of facilitation for you. Granted that it may seem costly and depending on culture, a little paranoid, but it has great advantages as well.

The facilitator adds to the trust which is counter intuitive but true. This works well because facilitator is seemed impartial and can ask questions that internal participants may shy away from due to power equations. An external facilitator if chosen well, can have many benefits.

Unclear Strategy

Its common to have talent management programmes but very few have the returns one hopes for. And the major problem is the absence of talent strategy as well as alignment, thereof. A well thought of strategy will articulate, why talent review needs to be done, what need will it meet in a particular organization and how will it be done to deliver that advantage. Strategy must take into account considerations like attrition, talent availability in market, talent availability in house, risk in critical roles, engagement levels, readiness levels, talent mobility and diversity.

A clear strategy will not only help observe and ensure returns but will also save a lot of money and time. In absence, organization struggles to identify the real talent, retain high potential employees and eventually money spent on them goes waste.

There are many other things to watch out for, but in my conversations with talent managers, these three have come across as the biggest problems of talent reviews. For the review to work these three problem areas must be fixed without doubt.