One of the biggest frustrations I encounter with executives and managers I work with is making bad hiring decisions. The impact of making wrong decisions can be costly to the company. I have seen studies that suggest the cost of replacing a salaried, professional worker is one to two times their annual salary.
We do assessments as part of our work with companies, and many use these as part of the hiring process. One more than one occasion, I have been asked by an executive if I could just come up with a test that tells him whether to hire someone or not. Unfortunately, no such test exists that would predict hiring success with 100 percent certainty.
Probably, no organization goes to such lengths to make good hiring decisions as does the NFL. Millions of dollars are at stake in making the right or wrong decision when it comes to selecting high round draft choices. And when you think about it, NFL teams have a lot more information about a candidate than businesses typically have about their candidates.
NFL teams have a plethora (I think that’s a Howard Cosell word) on data about the physical characteristics of a player. They know how hast he runs, how strong he is, how agile he is, and so on. Potential draft choices go to the NFL combine where they are evaluated in person by coaches and scouts. They have hours of video of the players performing on the field in the same roles they will have in the NFL. In the early 1970’s, the Dallas Cowboys started using the Wonderlic test for cognitive abilities and now every potential draft choice takes this test. The theory is that players with better cognitive abilities will perform better on the field because thinking and intelligence is involved. In looking the historical data, two interesting facts emerge. One is that the highest scoring group was offensive lineman, not exactly the position that you would equate with needing high intelligence. The other is that some of the greatest quarterbacks (the position that you would expect to require the highest cognitive abilities) scored much below average on the test than mediocre quarterbacks. Among those scoring low were Peyton Manning, Dan Marion, Terry Bradshaw, and Joe Montana.
So when you think about the amount of information that an NFL team has about a prospect, why isn’t their record in predicting success nearly 100 percent? I think it is because of the uncertainty of taking information about current skills, knowledge, and attitudes and projecting it into a future situation. This doesn’t mean that what they are currently doing is worthless and should be eliminated. I would venture that their success rate would be much lower without all of the evaluations that they do. When the Dallas Cowboys were the only team to incorporate all of the current practices in their selection process, they had a much higher success rate than any other team at the time. That’s why all the teams do the same thing now.
So if NFL teams can’t be 100 percent successful with all the information they, how can businesses who generally have far less information, expect to be perfect. The answer is that they can’t. There are a number of things that can be done to improve the odds, but the selection process will always have a degree of uncertainty.
In statistics, there are two types of errors associated with any decision or hypotheses involving data with uncertainty. Type I error is assuming something is good when it is really bad. Type II error is assuming something is bad when it is really good. The total error remains constant, so if we want to decrease Type I error, Type II error has to increase accordingly. Applying this to hiring situations, it means that if we want to make fewer Type I errors (a hiring mistake), we have to be willing to accept more Type II errors (rejecting candidates who may actually have been good employees).
My experience is that companies tend to do just the opposite. Sometimes they are under such pressure to fill a position, they will take the risk. Often something may show up an interview or on an assessment that raises concerns, but the company decides to proceed with the hire anyway. So one way to reduce hiring mistakes is to be much more rigorous in accepting candidates and be willing to accept more errors on rejecting potentially good people.
Over my many years of business and consulting experience, I’ve concluded that success in a job comes down to three factors. They are the capability of the person, how the person is managed, and the culture or environment that the person must perform under. Note that only one of these three has anything to do with the person. I’ve seen numerous situations where a person was a star performer at Company X, yet was a poor performer at Company Y. The person didn’t change-either the way they were managed changed or the culture was different.
So not only is it important to to get as much information about a candidate as possible, it is also important to be able to determine their fit with the culture and with the person that they will be working for. After a couple of situations where a person who looked like an ideal candidate did not work out in a job, I now want to know the behavioral and management style of the person the candidate will be working for. Some styles are naturally incompatible, and while either party could adapt, more often than not it just creates problems in the future. In addition to assessments, having a candidate describe their ideal boss, or “boss from hell” in the interview can provide insight as well.
Finally, no matter now competent someone is, and how compatible they are with their boss, some people won’t succeed in a culture that is contrary to their own values and beliefs. Again a combination of assessments and good interviewing practices can reduce the error in this case. Finding out what motivated or demotivated a person in their current or past job can be real eye opening.