How to hire the right people!

The costs above are true whether you hire a top performer or a poor one; they're basically processing costs. They have nothing to do with the quality of your hiring decisions.

What's the cost of a bad hire? Corporate Training Services, a division of the American Management Association, Leawood, Kansas studied this issue. They considered lost productivity and company credibility, poor morale among existing employees and oppressively high costs of unemployment insurance. They concluded, "Total those and other factors up and the average cost of a bad hire is $210,000".

Aside from the above references, hiring a person at $30,000 per year, who stays five years, represents a $150,000 decision in salary expenditure alone. Even at lower pay rates, hiring decisions represent a major investment in both time and money.

Let's get back to the question of the quality of hiring decisions.

How are we doing?

The purpose of the selection interview is to pick the candidate with the highest likelihood of being successful on the job. How well are we doing that now? Not well. Countless research studies have shown that traditional interviewing techniques result in an average of 14% accuracy in predicting future success (Ofsanko, F, 1983. Validity generalization: Report of a conference. Industrial Psychologist, 20, 34-36). ProSelect is intended to help you beat those odds and raise your predictive accuracy to the 50% to 60% levels as many researchers have shown to be possible with good structured interviewing. In short, we're trying to do something about hiring the wrong people 86% of the time!

In view of all of the above, why don't we pay more attention to our hiring decisions?

Filling a vacancy is uncomfortable and stressful because you hire so seldom that you've never "studied up" on the subject and you worry when reading about job applicants winning lawsuits because employers have mishandled the hiring process.

And what about the stress that comes from the extra work involved in covering the vacancy, recruiting, interviewing and training? None of this was planned before learning that your employee was leaving...and none of it was in your budget.

The result of all this is that the hiring decision gets less of your effective attention than it deserves. Following the ProSelect System will help greatly to remedy these problems by making it easy and convenient to do the hiring job right. And it will pay off in increased confidence, long term benefits and constant bottom-line improvements.

Disadvantages of poor hiring decisions

Let's review some of the disadvantages of poor hiring decisions.

Inept hiring decisions result in higher turnover. This requires additional recruiting, screening, and interviewing expenses. It also means additional time and expense for training the newly hired. There are costs of lost production during the time the inferior employee worked; during the time the position was totally vacant; and while bringing the new employee up to speed.

Each time you fill a vacancy, you also need to consider the increasing litigiousness of job applicants. Many laws protect applicants from various forms of illegal discrimination based on age, sex, race, religion, national origin etc.

By its very nature, the hiring process involves discrimination. The only one not discriminated against is the person hired, so the process is a natural breeding ground for legal challenges. Applicants may feel the "real" reason they weren't hired was their age, race, sex, religion etc. You must complete the process without illegally discriminating. In other words, you must accurately evaluate the applicant's skills, knowledge and abilities as they relate to the actual requirements of the position. This is exactly what ProSelect does.

Traditional interviews reveal few, if any, of the weaknesses of your applicants. As a result, applicants leave the interview with the thought that they did so well they will surely be hired. When not successful, they are inclined to believe that reasons other than their qualifications were the cause. This attitude increases the possibility of a legal challenge. The traditional interview leaves you with little or no basis to stand up to such challenges. There is usually little or no record of what was discussed in the interview and often no documentation proving the applicant's weaknesses.

A proper hiring protocol actually reduces the possibility of challenges from applicants. With good structured interviews, applicants always know that their job-related weaknesses have been uncovered. They leave the interview with doubt in their minds, and will not be surprised if they fail to get the job. For these reasons, your decisions will have a higher degree of acceptance with the structured approach. If a challenge does arise you will be fully prepared to defend your decision.

Finally, a poorly administered hiring process results in negative public relations with those applicants you have considered. The significance of this is difficult to measure but the consequences could be detrimental to your department and the company or institution. This review will show you how to "still be friends" even with those you do not hire.

The "structured approach" to interviewing

We may have painted a rather gloomy picture of the applicant selection process. How do you reduce the problems? Personnel professionals have conducted research on applicant selection for many years. Their findings show that the traditional job interview yields poor results - but switching to a "structured job interview" can improve results dramatically.

According to the Journal of Business and Psychology , this new breed of interviews is far more valid than traditional, open-ended interviews (McDaniel, M.A. & Jones, J.W. 2, 327-345, 1988). The traditional approach is unplanned, and usually results in the interviewer doing most of the talking. Little is learned about the applicant except for the firmness of his/her handshake. The structured approach is carefully planned around incisive, job related interview questions, and the applicant does most of the talking.

Advantages of a structured approach

One of the best research studies on the structured approach was reported in an award winning article in TRAINING magazine, (Interviewer Training: The Key To An Innovative Selection Process That Works, Dec. 1983, p.57).

In this study, both structured and traditional approaches were used separately in comparable units of a large retail company (J.C.Penney) and then evaluated.

The results dramatically favored the structured approach. Those hired under the structured method had much lower turnover, higher performance evaluations and were promoted more often. It was estimated that within two years the company would save $6 million in turnover costs alone, by expanding the structured methodology throughout the company. The value of having more productive employees would increase savings significantly more.

Later, it was reported that the company estimated it had received a $10 million pay back in two and a half years by adopting structured interviewing. (Cascio, W.F. (1992) Managing Human Resources, (3rd edition). New York: McGraw Hill).

How is the company doing? Money Magazine reported on September 5, 1996: "Retail sales reports for August are starting to come in and the results are decidedly mixed. J.C. Penney posted a seven percent increase, while The Gap saw its sales pace slow. Sears and Wal-Mart reported gains of about 4% from the prior year." Their sales growth exceeded that of their competition by 75%.

The structured interview ensures that the interview discussion focuses on the applicant's qualifications and that all applicants are asked the same comprehensive set of questions. It helps to eliminate unconscious biases of the interviewer and it builds interviewer's confidence in interviewing and evaluating applicants. It also provides a record of how and why decisions were made. Furthermore, such a standardized evaluation system leads easily to a final decision. And, as evidenced by the above, it works!

How to design interview guides for
conducting structured interviews

The following six step process is your "recipe" for getting started with ProSelect.

1. Selecting an interview guide.

Use the ProSelect "Interview Guide Library" to select a master guide that has been pre-prepared for the same occupational category as your vacancy. For example, if you are filling a secretarial position you would chose the master guide for "Clerical" positions. Read through the guide on screen and if it looks appropriate, automatically download it to your word processor where you will do the final editing. Next ......

2. Identifying "competencies"

Competencies are nothing more than important aspects of the job which are then translated into measurable requirement categories you will use to evaluate applicants. The best interview guides are based on competencies that have been derived from a job analysis process that includes input from people knowledgeable about various aspects of the job.

For example, your vacancy may require knowledge and/or experience in using various office equipment such as computers, fax machines, printers, etc. This can be translated into a competency you might call "Technical/Specialized Knowledge." Some competencies apply to all jobs and others apply to only specific jobs. The above example would not apply to all jobs but a competency like "Problem Solving" would.

The following universal competencies are included in ProSelect. If you chose, these competencies can be modified or replaced entirely with competencies you develop. You are cautioned, however, to be careful that material you design on your own is in compliance with legal requirements.

Decision Making

Work Experience

Problem Solving

Technical/Specialized Knowledge

Supervision/Leadership

Manual Skill

Verbal Communications

Written Communications

Career Goals

Interpersonal Relations

Planning

Personal Characteristics

 

The master guide you chose to work with in step #2 will include only those competencies having the most relevance to the type of position you are seeking to fill. Now, all you have to do is think about the duties of the vacant job (use your job requisition and job analysis for reference) and ask yourself what requirements are needed to successfully perform the functions of the position. Then use your word processor to delete the competencies (and related interview questions) you will not be using.

Be sure, however, that the competencies you keep are all directly related to the duties of the position. You will typically want about 5-8 competencies.

3. The interview questions

The next step is to select interview questions for each competency. The process here is the same as for competencies. You just delete the questions you do not want to use. You may wish to insert interview questions of your own design, as well. Use questions that will harvest the most relevant information related to your vacancy.

4. Weighting competencies

You have now completed the first three steps; selection of your master guide, the competencies; and written interview questions for each competency. The next step is to "weight" the importance of each competency. This will ensure that your final evaluations are more heavily influenced by the competencies you consider to be most important to the success of the applicant.

5. Conducting interviews

You're now ready to conduct the job interviews. Prepare copies of the interview guide to use with each applicant you expect to consider. You will take notes and assign scores on the interview guides.

6. Evaluating results

Recent research suggests that It is best to "score as you go". Quick responses to scoring have been proven to be most accurate.

You rate each competency based on responses you received from the applicant during the interview. Write the scores in the "Rating: ___" fields of the interview guide for all of the applicants you've interviewed. When you're done interviewing and scoring you can use the following score sheet to calculate results:

Scoring Sheet

Competency	Weight	Score	Score x Weight
1. ___________________	______	_______	____________
2. ___________________	______	_______	____________
3. ___________________	______	_______	____________
4. ___________________	______	_______	____________
5. ___________________	______	_______	____________
6. ___________________	______	_______	____________
7. ___________________	______	_______	____________
8. ___________________	______	_______	____________
9. ___________________	______	_______	____________
10.___________________	______	_______	____________
______________________	______	TOTAL-->	____________

Summary

An interesting outcome has been observed by those who have converted to a structured interview approach ..... job applicants have complimented them on the interview! Applicants have even given favorable comments after being told they would not be hired.

In one account, an applicant asked for a copy of the interview guide so he could use it to practice for future interviews with other employers. Attitudes such as these can only improve the image of your department and the company or institution. A further benefit is that applicants who are satisfied that your hiring decision was fair and equitable are not likely to challenge it.

If you use the ProSelect System, you will eventually have your own library of interview guides for all of the positions that have had employee turnover. When a vacancy arises, all you have to do is dust off one of your old guides, check to see if you can make any improvements, and then use it. Improving your guides should be a constant process. You may also want to exchange guides with colleagues in other work units.

Are you ready to try it? If not, please read "Advantages"...just one more time.

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Opening screen
Introduction (Sample approach for introducing the system within a company)
Hiring Policies and Procedures
Interview guide concepts
Guide Library (Primary access point for experienced users)
Legal Do's and Don'ts
Interview Guide Design Tips
How to create a guide
Conducting the Interview
Evaluating & scoring candidates
Panel (Search Committee) Interviews
Diversity
Detailed document about the system
Recruiting Tips by Dr John Sullivan
Employee Retention Tips by Dr John Sullivan
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