Seven "Non-Negotiables" to Prevent a Bad Hire

by David K. Williams and Mary Michelle Scott   May 31, 2012 www.blogs.hbr.org

The costs of a bad hire are staggering. A recent survey by Career Builder reports more than two-thirds of employers were affected by a bad hire last year, according to AOL Jobs. Of nearly 2,700 employers surveyed, 41% estimate a single bad hire cost $25,000; a quarter estimate a bad choice cost $50,000 or more — not to mention the demoralizing effect of the issue on other employees and on the new hire. Losing a job is one of the most stressful events a human can experience.

To avoid that, when we make hires, we screen candidates using a list of personal characteristics we call the Non-Negotiables. First there were four. Ultimately, we've expanded the list to seven. These are the characteristics that have become the primary criteria for hiring decisions — things we value even more than skills and background. When we add people to our nearly 100-person company, these criteria are non-negotiable.

The seven Non-Negotiables are Respect, Belief, Loyalty, Commitment, Trust, Courage and Gratitude.

Ideal hires bring traditional and job-specific capabilities and high proficiencies in these seven core traits. However, in many cases, the Non-Negotiables have led us to make what others would consider "unusual hires." The result, for our company, has been near-zero turnover — and many employees express the desire and willingness to stay with us for life.

It took us a few years before we fully embraced the concept of the Non-Negotiables as an explicit hiring goal. We always sought individuals with high character strengths and strong work ethics. In HR parlance, we looked for "athletes," and we talked about assessing the right fit through a strong "gut feeling." Since January 2011, we've gone further: We've now articulated these traits as full and formal requirements for the people we hire. Granted, it is more difficult to identify and assess character traits than concrete skills — however, the strategy we are using thus far seems to be meeting success. We ask potential candidates to tell us about situations where they have exemplified each of the non-negotiable traits. Because each candidate is interviewed by multiple leaders, we compare assessments on each of the traits. Later on, we may also move to an actual scoring system as well.

We also ask the same questions of the individual's references — not the references they list on their resume, but of their former co-workers, associates and bosses that we identify independently, and who are in a position to speak open and candidly about the candidate's strengths (or weaknesses) in exhibiting these traits. Clearly, it's not an exact science — but we are finding the ways to become more precise as we grow.

At times focusing on this non-traditional hiring criteria leads us to hire people with unusual backgrounds. When Kevin Batchelor — now one of our two VP's of Engineering — came to work here, he was not a programmer at all; his degrees were in theater and anthropology. Now, eight years later, his software designs are winning awards. John David King — now our EVP of Sales and Marketing — had no prior background in leading a sales organization. He had heart, spirit, and character, coupled with a law degree and a bachelor's degree in communications.

We've filled our developer ranks largely through a partnership with Utah Valley University. We started by looking for interns — the right people with the right characteristics who wanted to learn how to code. One of them was a firefighter, one an electrician, and one was in the culinary program. Some were programmers by training, but only interested (or so they thought) in programming Internet games.

We have a strong community focus — of our near 100 employees, 40 are or have been interns working on flexible schedules to allow them to finish their degrees.
Our approach is contradictory to most conventional management wisdom, which suggests that hiring managers focus on relevant skills and experience. But it is working for us.

Our company has no shortage of talent because we've trained the people we bring in with care. Our employees are respectful of each other, and as a company we strive to be respectful of others as well. In a competitive $1 billion software market we are collegial — we list our competitors' offerings along with our own products on our Facebook page, and we applaud their successes along with our own.

Our hiring strategy has built a loyal base of employees during a time when the typical career path is to "keep the options open" and to be at least periodically shopping around. Our strategy will continue to be the right one for us. Perhaps it could work for other organizations as well. We look forward to your opinions and thoughts

People Want Jobs That Make A Difference, Even If It Means A Pay Cut

 Ariel Schwartz www.fastcoexist.com

A new survey comparing college students soon to enter the work force with current workers found that everyone wants an "impact job," and would do a lot to get one.
The job market may be bleak, but college graduates of all ages still have high hopes that they will eventually land "impact jobs" that make a difference socially or environmentally. So says Talent Report: What Workers Want in 2012 from Net Impact, which surveyed 1,726 college students about to enter the workforce as well as employed four-year college graduates (including Millennials, Generation X, and Baby Boomers) on their life goals, job satisfaction, and desire to have an "impact job."
Here’s what the survey found.

• Somewhat surprisingly, current workers said that having an impact job was more important than having children, a prestigious career, wealth, and community leadership. The top two most important things to have for happiness: financial security and marriage. Financial security still matters more than making a difference, but wealth isn’t important for people if they can do some good.
• That’s especially true for students: 58% of student respondents say they would take a 15% pay cut to “work for an organization whose values are like my own."
• Almost 60% of students also expect to have multiple job offers to choose from (that may be a little overly idealistic); 37% believe they can make a positive social or environmental impact within five years.

 Half of current workers care if their job helps make a better world, but 65% of students care.

Among current workers, work/life balance is the most important aspect of an ideal job. A positive environment is the second most important piece (it’s most important overall for students), and interesting work is third. Having a prestigious employer is the least important piece.

There are a few big differences between students and workers: 50% of students say it’s important to have an employer that prioritizes CSR, while only 38% of current workers care. Half of current workers care if their job helps make a better world, but 65% of students care.

Overall, women care more about impact jobs than men: 30% of women say they would take a pay cut for an impact job, while 19% of men say the same thing. And 60% of employed women believe that working for a socially and environmentally conscious employer is important, compared to 38% of men.

In spite of the student population’s idealism, Boomers are most likely to vote (73% compared to 43% of students in the last year), boycott a product or company, or volunteer outside of work.

What does it all mean? Employers had better start taking action now to accommodate the burgeoning socially conscious generation of college grads (which paradoxically does not seem to be civically minded at all). And those new grads, in turn, might want to check out some of the new impact job resources that have started popping up.

Ariel Schwartz is a Senior Editor at Co.Exist.

Illegal job interview questions

by Dave Johnson Feb. 27, 2012 www.cbsnews.com

If you are a manager at a large corporation with a well-staffed HR and legal department, you've probably gotten a wealth of training on how to conduct a job interview. But if you own your own company or are a manager in a small business, it might be up to you to keep yourself out of trouble when you start the hiring process. Do you know what kinds of questions you're legally allowed to ask? Knowing the limits will help you avoid lawsuits and make smarter hiring decisions.

First of all, there are a limited set of topics that are protected -- in other words, you may not make hiring decisions based on these considerations. The good news is that the list is quite short and is mostly obvious stuff that common sense would dictate is off limits:
Race
Color
Sex
Religion
National origin
Birthplace
Age
Disability status
Marital status

Sometimes, though, applying this list in real-world situations can be confusing, and it's easy to ask something out-of-bounds when it's possible to get the information you really want with a slightly reworded query. Networking site Excelle put together a list of illegal questions and their re-worked legal alternatives.
Illegal question: How old are you?
Legal version: Are you over 18?

Remember that while you can't ask someone's age, it's perfectly legal to ensure they're legally old enough to work for you.
Illegal question: Do you have kids?
Legal version: Are you willing to travel for this position?

You can't ask if someone is married, divorced or has kids. But if you are trying to determine if they can manage travel or flexible hours, go ahead and ask that directly.
Illegal question: Are you a U.S. citizen?
Legal version: Are you legally authorized to work in the U.S.?

Where your candidate is from is immaterial; the real question is if they can legally work here. Just don't directly ask if they have a work visa -- it's HR's job to ensure all the paperwork is complete before the start date.
Illegal question: Have you ever been arrested?
Legal version: Have you ever been convicted of [fill in the blank]?

Perhaps surprisingly, you can't ask someone about their general criminal background. But it's appropriate to ask about criminal behavior that's directly related to the specific field or career in which the person is applying.

How and Where to Find Your Next Superstar

Contrarian Hiring Advice to Find Your Next Superstar
To succeed, surround yourself with great talent.” Like most platitudes, sounds great. 

Also sounds expensive.

Facebook has the resources to buy companies in order to get excellent people. Most businesses do not.
So how can you surround yourself with Ferraris when you have a Hyundai budget? Start by thinking in stock market terms: People, just like stocks, are often underappreciated and undervalued.
Who is typically undervalued? People who are skilled but inexperienced. People with extensive education in the “wrong” field. People whose current job lacks sufficient “status.” People who suffer from negative social stereotypes.

The key to finding great talent at a price you can afford is to be a hiring contrarian. Go against the grain and against conventional wisdom. Then you can find your next superstar — and give someone a chance to show what they can really do in the process.

Here are some examples of talent hiding in plain view:

Career switchers. Take teachers. Many love to teach but hate the pay. (Can’t blame ‘em.) Teachers are excellent trainers, understand how to manage different personalities, and are great at motivating, encouraging, and nurturing other people. While you can train skills, do you have the time and resources to “train” qualities like those? Where career switchers are concerned, the key is to ignore their industry and look at the qualities the person possesses: A firefighter works well under pressure. A salesperson is a self-starter. A mechanic is an excellent troubleshooter. Toss an outstanding person out a plane and she will probably excel no matter where she lands.

Athletes. Granted I might be biased, but sports are an excellent training ground for business. A recent graduate who played a sport is self-disciplined, motivated, great at multitasking, able to overcome adversity, understands the value of teamwork… all qualities you can definitely use. Every year approximately 400,000 college student-athletes enter the job market. Snag one.

Ex-convicts. This category probably ranks highest on the “give someone a chance” scale. Celebrity chef Jamie Oliver’s FIFTEEN restaurant hires 18 unemployed people a year, providing education, training… a chance. Seventy-five percent of the program’s graduates go on to successful careers. Many companies routinely reject anyone with a criminal record; do that many of your new hires — all of whom at one point you felt were sure things — turn out to be excellent employees? Probably not.

Crappy current job. You glance at a resume: The current job is telemarketing, or fast food, or stocking shelves. What is your first thought? Admit it. You think, “Well, if that’s all they’re doing now…” It’s easy to assume a person who currently has a less than wonderful job is only “worth” a job like that. (I have to admit this stereotype bugs me; I started as an entry-level material handler and eventually ran all manufacturing operations.) The fast food kid has more customer service experience than you do, and the warehouse worker may possess the attention to detail and work ethic of an accountant on PEDs.

Military. This time I’m definitely biased. I hired hundreds of people and definitely made mistakes, but I never regretted a single ex-military hire. Not one. Need a leader? The military is probably the only organization that puts as much or more emphasis on leadership training as it does on skill training. Need someone to see a task through, or to be able to follow as well as lead, or to be able to make smart decisions on the fly — and stand behind those decisions? Go with a vet. Every time.

Youth. Of course they don’t have any experience. How could they? You and I were young once too. Someone gave us a chance — and we worked hard to show that person they made the right decision. Some percentage of your new hires should be kids just entering the workforce. You get energy, ideas, enthusiasm — and the chance to truly grow your own.

I realize undervalued assets tend to appreciate as their true value is recognized. Someday the teacher you hired to run your customer service department may be a hot commodity and leave for better pay. That’s how it works; eventually the market recognizes the value of a superstar. And that’s also okay; wish him well and be glad you had him while you could afford him.

In the meantime, keep unearthing gems so your talent pool stays stocked.

By Jeff Haden | August 5, 2011        BNET.COM

A $50,000.00 mistake

The Value of Employee Assessment

A friend of mine, Rob Wilson*, tells a story about how hiring an employee can be compared to purchasing an expensive copier. It goes something like this: "Would you ever make a $50,000.00 purchase on a copier when you never knew if it was going to show up and work or not, it is not going to get along with other systems, it has good days and bad days, be productive one day and not the other, and by the way, it could leave at any time. Now, how many of you would want to sign on to a $50,000 copier if that's the way it would produce, and yet that's what we do with employees all the time. We make a $50,000 decision based on 'Well tell me a little bit about yourself?' "

Michael Jordan
He goes on to ask "How many of you know the name of Michael Jordan? Yes? Great. Michael Jordan has an awesome resume. Tremendous resume. And if you were going to hire him as an athlete, there would be no question that he would be qualified... unless he showed up for the Chicago White Sox.  We all know that story, a supreme athlete, I mean the man can fly, and yet when he came to the Chicago White Sox the man was essentially fired."

It all comes down to Job Fit. Job Match.
Rob finishes by saying "Now how do we determine if somebody is going to have job fit and job match? We have to get below the surface. We have to get below the iceberg. We only see the tip and that's what they sell us. We need to get below the surface, and find out exactly what are their life interests, what are their capabilities? Maybe with our IQ test, and math and problem solving tests, those types of skills. But more importantly, where do they fall in line by matching to our people? You can be a terrific sales person in Manhattan Kansas, and fail miserably in Manhattan, NYC!  It's all based on culture and environment."

As the business environment becomes more competitive, people, not processes and technology, increasingly become the differentiators. As a result, it is more important than ever to implement the best possible assessment systems in order to select, retain and develop talented people.

The Value of Assessment   in this kind of environment is that it gets the "right people on the bus" and the "wrong people off," thereby decreasing the costs associated with bad hires and increasing revenue potential as a result of talented employees. In addition, assessment plays a vital role in employee development as it streamlines the development process by targeting KSAs in need of development.

At the Individual Level,  assessment systems increase the probability of job fit, provide a road map for development, and open the door for rewards and advancement.

Finally, HR needs to become more strategic in influencing the organization's decisions. Assessments can help in this regard because they quantify the value of HR programs and services. In order to demonstrate true value, HR needs to measure the impact of programs on the key metrics driving organizational success.

*Rob is Vice President at 360Solutions llc. Waco TX

Validation and the 360 Solutions Assessments -Personality profile

There are many schools of thought regarding testing and validation. Some believe that construct validity is the most preferred method, others say criterion validity is the best approach. Still others say that a combination of both is the best of all possible worlds. We believe that common sense, good business sense and concurrent validity on a local level is the best approach. Why?


First, the goal is to find the best possible person for the position. Most hiring managers will say: "If I could ‘clone’ my best employee or employees in the same or similar positions, I would achieve my goal." Therefore, we attempt to identify the best candidates by a validation method known as "Concurrent Validity". What is concurrent validity? Quite simply, this is Benchmarking.
Benchmarking is achieved by selecting people with a common job description and evaluating them using the 360 Solutions Personality Profile. By grouping these individuals into Top, Middle and Bottom thirds, based on your standard measure of performance, it is possible to build a hiring benchmark using the Profile scores. The benchmark is based on a comparison of the top one third’s results versus the bottom. Additionally, we believe you should take this approach one step further and create your benchmarks on a local level.


Why do we recommend this approach?

Because what works in New York City does not necessarily work in Atlanta. What works in Dallas does not necessarily work in San Francisco. Many testing companies develop "norms" based on national averages of the top performers in a position. You then compare the test results of an applicant against those norms to determine if they will succeed in the position. To use an analogy, if my best performers in New York like ice cream, in Chicago they like deep-dish pizza, and in San Francisco they like sushi and I average them all together, what I get is a gastronomical mess. To further prove the point, practical experience shows us a top salesman in New York must modify his selling style in order to succeed in Atlanta. Why? Different markets. The Southern prospect may well reject the more aggressive selling style of the New Yorker. The same holds true for companies selling the same products or services. What works at Ford doesn’t necessarily work at Chrysler.

Second, the selection test must meet all EEOC and American Disabilities Act requirements. The 360 Solutions Personality Profile does.

Third, equivocation. Are you getting a true picture of the employee or applicant? The 360 Solutions Personality Profile has a consistency index. If the score is between 17-20 the results are considered 90% accurate to the individual tested. A score 0f 14-16 is considered 79-89% accurate. If the consistency score is below 14 and the tested individual is not an E type personality, the report should not be considered valid. If the tested individual has low confidence as measured by the Personality Profile confidence trait, this will affect the overall scores. If the confidence score is below 5, the report should not be considered valid.
Summary


In order to find the best candidate for the position, you must assess the candidate’s personality and skills to see if they "fit" local market conditions, office culture, management practices, and selling styles. How is this done? Through benchmarking. Your top producers are "best" in their positions because they have the skills to do the job and their personality is compatible with what you are asking them to do. By using the 360 Solutions Personality Profile and creating a benchmark around these top producers, you take into account the variables unique to your company and the affect these variables have on the human personality.

Statistical Analyses Supporting Benchmarking

In early 1997, a study was undertaken to see if there was any direct correlation between the 18 personality and character traits measured by the 360 Solutions Personality Profile and commissions earned on a national level. Profile scores from 64 companies across the country were gathered. Particular attention was paid to ensure that no one region of the country was more heavily weighted. Managers were then asked to rank their salespeople in terms of top and bottom one-third producers. Only salespeople with one year or more experience were included in the sampling. The criterion for ranking was commissions earned. The following character and talent traits were analyzed:
Stress Management     Outgoing Traits               Persuasive Level


Sensitivity                     Interaction                     Aggressive Level

Compassion                  Decision Making           Stubborn Level

Patience                        Analytical Setting           Goals

Creative Abilities           Independent                  Time Management

Artistic Abilities             Detailed Traits                Confidence


A single regression analysis was conducted for each trait against commissions earned. The highest r2 value achieved was .12. Second, a series of multiple regression analyses were conducted with as many as seven character and talent traits against commissions earned. Again the highest r2 value achieved was .16. Finally, a Pearson correlation coefficient analysis was conducted with each trait against commissions earned. The highest r-value achieved was .34. All of the above values show that there is at best a weak correlation between profile scores and commissions earned. Scores obtained on a national level would be unsatisfactory predictors of commissions earned


Conclusion

Other variables, such as local market conditions, selling styles, and management practices, as well as personality and character traits affect commissions earned. To further substantiate this, the following are the sales hiring benchmarks for two different companies. Both company benchmarks were established based on the top one-third producers’ results. The first company is located in the Midwest and the second is in the Southwest. Both have twenty or more salespeople and have been in business 10+ years. Both sell similar products.

©2010 - 360Solutions
It is apparent from these results; the benchmarks based on the top one-third producers in each company are very different. Yet, the products sold and incomes earned are very similar. Thus, benchmarking on the local level allows managers to have a method of "cloning" their most productive employees based on their company’s culture, management practice, selling style and other issues unique to their environment.

Determination of Accuracy

The same 64 managers were asked to rate the accuracy of the 360 Solutions Personality Profile on the top one-third and bottom one-third agents. As stated earlier, top and bottom were defined by the criterion of commissions earned as related by the managers. Additionally, only salespeople with one or more years of experience were rated. The average company employed 22 salespeople. A total of 896 salespeople were measured. The screening question asked was:

"On a scale of 0-100% how accurate was the 360 Solutions Personality Profile report on ______ (employee)?"

This question was asked during normal business hours. The manager made this rating within 24 hours of the reviewing the report, and before a joint review of the findings.

Accuracy of 360 Solutions Personality Profile

As Rated by Managers

Test Accurate % % of Managers Agreeing


95+ 23.4

1. 53.1

1. 10.9

1. 4.7

1. 3.2

< 75% 4.7

During this same period, tested salespeople were asked to percentile rank the accuracy of the 360 Solutions Personality Profile report findings. The screening question was:

"On a scale of 1-100%, how accurate was your 360 Solutions Personality Profile report?"

This question was asked during business hours. The salesperson made this rating within 24 hours of reviewing his or her report, and before a joint review of the findings.Test Accurate % % of Agents Agreeing

95+ 26.9

1. 51.0

1. 9.0

80-84 8.0

1. 3.0

< 75% 2.1

Summary

76.5% of company managers felt the 360 Solutions Personality Profile report findings had an accuracy rating of 90% or greater to their salespeople.

77.9% of the salespeople tested felt the results had an accuracy rating to themselves of 90% or greater.

Conclusion

Both the salespeople and the managers confirm the accuracy of the test. Therefore, it is logical to assume that local market conditions, selling styles, management practices and other environmental factors, as well as personality character and talent traits, affect the amount of commissions produced. Thus, the best possible method of selecting a salesperson that will succeed on a local level is through the benchmarking of the Personality Profile scores. This method takes into account the personality, character and talent traits necessary to succeed under variables specific to the candidate’s environment.

Final Note

The 360 Solutions™ Personality Profile with its unique benchmarking capabilities is the most cost-effective selection and development tool on the market today.

In addition to the profile results, this system provides additional important features to help improve the selection and development process:

1) In-depth interview questions are provided based on the Personality Profile score.

2) Additional skills and knowledge tests, including a Sales Aptitude Test and a Custom Aptitude Test

3) General intelligence and reasoning ability tests.

The results from the 360 Solutions Personality Profile System should not be viewed as the sole decision making tool in the employee selection process. Rather, they should be viewed as guidelines within an over-all selection system. The selection and development system should meet all legal requirements and provide other screening criterion such as background and reference checks.

The 360 Solutions™ Employment Testing System, properly utilized within the above guidelines, will help you to improve employee selection, reduce hiring mistakes and cut your turnover costs.

©2010 - 360Solutions