Critical ''world class'' employment selection principles

It doesn't matter how thorough, accurate, or "amazing" the description is - an example can make the point clear.
Most people are aware of the value of a rigorous medical examination. One of the most comprehensive is provided by the Mayo Clinic. It's expensive, takes four plus days of "data" collection including blood tests, X-rays, MRI's, stress tests, etc. By the time they are done, they can describe your present health in exquisite detail,right down to the chromosomes. They will also give general advice to improve the quality of your life like suggesting diet improvements or better exercise. Any condition you don't understand can be described in depth. If you have a serious or even life-threatening problem, this exam will find it. BUT, this is only a description of your present health. If you were to ask a predictive question, like how long you are going to live, or what are you're going to die of, they, of course, can't answer. That is the limitation of all "tests" that only describe. Most interviews, or personality, intelligence and aptitude tests are only descriptive. These may be useful to discover a present problem but are very weak at predicting future behaviour and weaker still at predicting future results.

There is a better answer, of course. Insurance, companies need to predict how long you are going to live very accurately. Their profitability depends on it. Descriptive information isn't enough for them; they have developed "actuarial science" to identify "predictors" of future health and longevity with incredible accuracy. The statistics they use are available but are expensive to develop. They depend on massive amounts of data and take a long time (for best results, you have to track performance over time). Unfortunately, most selection processes look for shortcuts and each shortcut weakens the prediction. The best shortcuts (interviews, short tests, personality assessments, gut feel) improve accuracy by only 3-10% at best and the worst actually work against you.

The good news... The very few actuarially developed predictive tests avaiable can add upwards of 25-35% accuracy...and that makes a huge difference to the bottom line.

Principle 2: You can't train a person for a job they can't do.

There is a major difference between "learnable" skills and "talent-based" skills. Most sports skills are talent based for example, while many more academic interests or hobbies are learned. Several skills important to business are innate and talent based, especially sales. These skills can be refined with coaching, mentoring and experience, but can't be created by training. Performance research shows that Entrepreneurship, Sales, Creative Writing, Advertising, and certain Design Engineering and Computer Programming skills are talent based. People with these talents begin showing traits at a young age. People who don't have the talent, will never develop more than weak ability in these areas. The useful rule of thumb for training improvement is the rule of 20%. That is, you can improve a raw talent already at the 80% level to a 96% (a superstar), but all the time and money in the world won't improve a 5% performer to more than 6%----a dreadful waste of money.

Principle 3: Talent-based skills are very narrowly applied and don't generalise to other positions.

If the position is not critical to your business, very average or "general skills" may be good enough. A sports analogy can make this clear. If you are selecting a cricketer at at the lowest levels, i.e., Baker's league, or SoftBall, the goal is not necessarily to win, but rather to train children in team work, having fun, and getting healthy exercise. Selection criteria are very general and shallow, only two are typically used: 1) that the child isn't ball shy and ducks every time a ball comes close, and, 2) that they have enough dexterity to swing a bat without falling over.

By the time athletes reach high school or university, coaches still have rather general but more specific criteria (winning, while theoretically not everything, is important). Here criteria include: running, fielding, throwing,catching and hitting. As a result, a coach starts to look for more specialised skills, although most teams will contain a fair number of "all-rounders." At the professional or international level level where winning is critical, coaches have much more stringent criteria. They recognise that the skills for fielding, for example, are highly specialised, and a fine leg will generally not be found at cover point or gulley.
In business, success in the talent-based skills is the same. If sales aren't important to your bottom line, very general skills are good enough for any sales position. If sales are important, then it's critical to recognise that new business development is usually not interchangeable with account management or customer service. And, selection for these positions will depend on very different criteria. This principle of very narrow and specific skill sets for talent-based positions versus the more generalised and learned skills explains why the most talented sales "stars" are not good managers and whilst the best managers played and understood the game they usually weren't the superstars. Hence the expression "promote your best salesperson (or engineer, artist, designer, etc.) and three bad things happen: you gain a weak manager, lose a great salesperson, and nobody is happy."

Principle 4: In job analysis and identifying selection criteria, less is more!

There is an old parable that explains the existence of a camel as the result of a committee trying to design a horse. Statistical regression analysis when applied to careful, thorough, and objective measures of real job performance skills, almost always substantiate a surprising myth about job descriptions. The more completely a job is described and the greater the number specific skills or competencies that are listed, the less likely an effective candidates will be selected to fill the job.

It takes a second look to understand why, but it can be explained. When actuarial statistics are run to determine the relative importance of different skills or attributes important to a particular job, only the first four to six most important skills actually contribute significantly to success on the job. Typically, the most important skill will carry a weight of as much as 50% or more in determining the success of any candidate. The next most important factor will contribute half of the first or less and the third skill will be half as valuable or less than the 2nd and so on. The concept of four to six "Critical Success Factors" has long been well documented in other aspects of business, but seldom thought about in job descriptions. Clearly, by the time seven or more factors are included, the selection accuracy is being substantially diluted. Consider the two applicants below. Sadly, the second candidate will be selected over the first and will fail miserably, while the first candidate will star... for some other company.

Principle 5: The famed 80/20 rule in business is the Kiss of Death.

Most businesses can identify a significant demarcation in many aspects of their operations. It can be recognised as "20% of my customers provide 80% of our profits," or "80% of our problems come from 20% of our products," or even "20% of our salespeople bring in 80% of our sales." While the numbers can vary somewhat...they underlie a troubling challenge. The 80/20 rule describes what is known as a "normal curve" or a "random distribution." In other words, if all key decisions had been made by the flip of a coin (purely by chance) then the business result would have been the 80/20 rule. In strong economic times, being "average" can be good enough. "A rising sea floats all ships." But where competition is, "average" isn't good enough. From a selection accuracy perspective, consider the bottom line impact of just a 10% improvement. If you are a mid-sized company with 100 salespeople and R100,000,000 in sales, and the 80/20 rule (or close to it) applies to you, then your top twenty salespeople bring in R80,000,000. Suppose you improve your hiring accuracy by 10% and now you have 30 top performers instead of just 20. The increase in sales would approximate R40,000,000. Taking the time and cost to select well pays huge dividends.

Principle 6: Profiling top performers to establish a model for selection or promotion criteria is fatally flawed.

This principle is so counter intuitive it almost sounds like heresy. Early government-sponsored research performed by Chally looked for common factors across a sample of over 1,500 top performing salespeople from over 60 different companies. A wide variety of factors were amassed including: biographical information, education, experience, test results, interview information, reference data, peer evaluations, and even customer feedback. The results "profiled" 16 factors that most consistently described the top group. Unfortunately, expanding the study one year later to conclude a similar sized sample of the poorest performing salespeople found that 13 factors on the "poor performing" profile were identical to the "star" sales profile. The critical learning is that "most common sense traits, personality factors, skills, etc., are, in fact, predictive of people who seek a given job, not of how successful they will be!!!" This is the reason that managers who rely on interviews, experience, gut feel and instinct and believe that they can hire with a high degree of accuracy, are deluding themselves. In one case, group of Real Estate Executive were asked to identify the traits they looked for when hiring estate agents. They agreed that high energy levels, good interpersonal skills, attention to detail, willingness to work long hours and an engaging personality were ideal. Regrettably, however, when the validation study was conducted, these traits were found in equal measure in the sales superstars and the complete failures. peter@challysa.co.za