[Jobs] Inc.com article for August 2006 on Hiring

[Mary Ann Rojek]

Thew Science of Hiring
Care to dramatically enhance your chance of finding great employees? Trade
in your gut instincts for a systematic approach to>interviewing, testing,
and evaluating job candidates.>From:
<http://www.inc.com/magazine/20060801/Inc. Magazine, August
2006 | By: Stephanie Clifford
----------
What was her company missing? Susan Bowman asked herself that as
soon as she plopped into her chair at Tri-anim, a medical-supplies
distributor in Sylmar, California. It was two and a half years ago.
Bowman had just joined the company as head of human resources, and her
highest priority was improving the company's hiring. When she arrived, the
HR department was basically shut out of the hiring of
sales people. Bowman wanted to make it more useful, especially after she
noticed some hires were fantastic and others were disappointments.
What Tri-anim was missing--and Bowman fortunately recognized this--was
something most employers in America have been missing: Conventional job
interviews don't work.>A typical interview--unstructured, rambling,
unfocused--tells the
interviewer almost nothing about job candidates, other than how they
seem during a couple of meetings in a conference room. But what are
these people like late at night and under pressure? What motivates
them? How smart are they? Have they handled tough projects? Do they
prefer working alone or are they better with a team? Regular
interviews assess barely any of this, and in fact are miserable
predictors of job success. In technical terms, they have a .2
correlation with predicting success.
Discouraging, isn't it? It would be--except that industrial and
organizational psychologists are on the job, seeking the best ways
to evaluate job candidates. A focused three-part approach can make
the hiring process as standardized and objective as possible--and
can help predict the best performers. The system starts with what is
called behavioral interviewing, in which candidates are barraged with tough
questions about how they've handled specific assignments
and problems. Bluffing becomes close to impossible, and the process
is based on facts, not feelings. Interviewing is followed by two
kinds of tests: cognitive tests, which measure intellectual ability,
and personality tests, which are now sophisticated enough that
companies can directly compare candidates with their top performers.
The third step is asking candidates to do tasks like the ones they'd
do on the job.

Most employers will recite over and over that people are the secret to their
success--and given that turnover costs about 1.5 times the
salary of the employee who moves on, according to
PricewaterhouseCoopers, they'd better mean it. But it's astounding how few
companies bother with more than improvised,
all-but-meaningless interviews to hire their people. "This is a
topic that's been researched to death by the field of industrial and
organizational psychology," says Peter Cappelli, management
professor and director of the center for human resources at the Wharton
School of the University of Pennsylvania. "The amazing thing is how few
companies take this seriously. It's kind of mind-boggling
that they would undertake such huge investments and not pay attention to
what we know about how to pick out the people who are going to be best."
Susan Bowman had been studying some of this research. She was pleased to see
that Tri-anim had been using the testing company PSI to assess candidates
for some positions. She was less pleased that the test criteria hadn't been
updated in six years and that some of the company's hiring managers didn't
use the tests. Bowmanimmediately had PSI reassess the best and worst
performers in a number of areas and develop profiles of the top performers.
The goal is to compare candidates with the ideal. Tri-anim sales people, for
example, need to be not just energetic and detail-oriented (pretty
common in sales people) but also unusually independent: They spend a
lot of time alone.
Bowman began requiring the PSI assessments as a last step in the managerial,
IT, and sales hiring processes. They've already turned up surprising
results. Recently, a recruiter and a manager were
disagreeing over two candidates for a position--until the PSI reports came
back. "The results were really staggeringly different.
It was a combination of not only skill sets, but that one
individual's people skills were so much lower than the manager had
anticipated and the other candidate scored much higher," Bowman says.

She has now trained all of Tri-anim's hiring managers in behavioral
interviews. "Structured interviews with behaviorally based questions
really allow us to drill down," she says. In a daylong session, the
managers learned the tenets of behavioral interviews and practiced
asking open-ended questions. Though she doesn't use work
assessments--and that could increase the company's hiring success
even further--these two steps paint rich, objective portraits of
candidates. Even the sales hiring managers, who didn't want to
abandon their random interviewing tactics, have become believers as
turnover has dropped. "We all want to hire the best," Bowman says. "This
gives really good, objective information that allows the
manager to take the halo off the applicant."

Step 1
In which the bored interviewer turns intrepid interrogator

Other than people's wan complexions beneath fluorescent office
lights, there's not much that's consistent in typical job
interviews. Topics discussed completely depend on the interviewer,
who might spend an hour discussing a candidate's alma mater, the
recent weather, or even himself. He could dismiss the candidate
before she's even started speaking because she's overweight or
overdressed, or he could lose focus because he's having a rotten
day. Afterward, the interviewer is left with a resume and a vague sense
of...how the candidate acts during an interview. Is she
qualified? Dunno, but her resume looks nice. Would she be good at
the job? Well, she likes to sail, which is fun..2  Correlation between
conventional interviewing and successful hiring

As psychologists have pointed out, traditional interviews produce a
subjective, acutely narrow view of a job candidate. That view is
likely biased--studies have shown interviewers tend to prefer
candidates similar to them, judge candidates on fewer criteria than
they think they're judging them on, and tend to let biases about
matters like race and gender get in the way. "Everybody thinks
they're much better interviewers than they are," says Ben Dattner, a
New York City industrial and organizational psychologist.

Still, the interview is a brilliant tool if you make certain changes
to it. Behavioral interviews have almost triple the correlation of
conventional interviews with job success. (To gauge if a hire is
successful, academics use measures like the dollar value of an
employee's contribution to the company, his or her relative share in
overall output, and later performance reviews, promotions, and
raises.) Behavioral interviewing involves, by definition, a group of
interviewers defining qualities needed for a job, asking candidates
to give past examples of how they've demonstrated those qualities,
asking the same questions of each candidate, and taking notes
throughout. The premise is that what someone has done in past jobs
is a superior indicator of what he or she will do in future jobs.
It's the same idea behind checking references.
To see how structured interviews work, take a look at Hope Lumber &
Supply, where HR chief Bill Vogt credits much of his company's
growth to behavioral interviewing. Hope, which is based in Tulsa,
brings in $1.2 billion a year selling building supplies to
contractors. Eight years ago, when the company was making a fifth of
that, Vogt and the owners predicted, correctly, that the housing
market was about to surge. If they hired the right managers, they
could ride that wave.

Following behavioral-interviewing maxims, Vogt starts by talking to
people intimate with the job and deciding what qualities are
necessary for it. He has a standard template for what he wants in
managers: leadership, a drive to make money for the company and for
themselves, ambition, and past operational responsibility. Depending
on the challenges of the specific business unit, he'll alter the template.

Then he comes up with open-ended questions that get at the desired
qualities. Behavioral interviews use questions that are rooted in
the past--"Tell me about a time when"--rather than
hypotheticals--"What would you do if?" Vogt digs deep into his
candidates' work experience. "I get into the current operation," he
says. "What did you inherit? What were the sales margins, accounts
payable, percent current status, inventory like? What did you do with that,
what did you achieve? Clearly, we're looking for
achievers and winners and people very knowledgeable of their
operation." Specific questions like these, in addition to assessing
candidates' skills, combat resume fraud--it's pretty difficult to
lie about sales margins and inventory turns.

>Ideally, a team of people will meet with the candidate. That
minimizes the importance of any one person's reaction, good or bad.
Vogt arranges a panel interview for general questions, and then sets
up one-on-one interviews focused on specific areas. Vogt asks about EEOC
compliance and OSHA incidents; the CFO asks about accounting
details; the COO asks logistics questions. In any behavioral
interview, questions should be job-related, to keep the interview
relevant and to avoid discrimination complaints. To the extent
possible, every candidate should be asked the same questions.
Interviewers should take notes, and should get together to discuss
their views just after the candidate leaves.

Step 2
>




In which the candidate relives college-entrance tests



As helpful as behavioral interviews are, they're even more effective
when combined with employment tests, many of which are now
administered online. These are given to candidates to assess either
cognitive abilities (cognitive tests are filled with SAT-like verbal
and math questions) or personality traits (personality tests include
preferential questions like "Would you rather spend a night at home
alone than go to a crowded party?" or biographical questions like
"Were you a class officer in high school?"). While cognitive tests
have a slightly closer correlation with job success, personality
tests are useful both as a basis for interview questions and for
subsequent development. For the best results, companies should use
both sorts of tests or a single test that combines the two elements.
(For a roster of tests, see
"<http://www.inc.com/magazine/20060801/hiring-test-types.htmlChoose
Your Weapon".)
Many testing companies today can do impressive comparisons of
candidates against existing employees--the goal being to essentially
clone top performers. "The assessments allow you to really identify
what is different between our stars and our slugs," says James
Hazen, an organizational psychologist and the owner of Applied
Behavioral Insights, a consulting firm based in Wexford,
Pennsylvania. Hazen uses several tests with his clients.
2,500 Number of cognitive and personality tests on the market

Assessments can turn up some fascinating findings. Dayton Freight
Lines, a trucking company based in Dayton, Ohio, had been having
trouble with drivers. Customers reported that some drivers were
rude. Some drivers were complaining over their CB radios. Some
workers' productivity was falling, or they were late on their
deliveries. Denise Noel, the director of quality at Dayton Freight,
was stumped. These drivers all had good qualifications and had
interviewed well, yet she saw no way to predict who would be an
outstanding performer on the road. Finally she brought in a company
called Hogan Assessment Systems and had the company present its
extensive research on truck drivers.

Noel had assumed all truck drivers were similar. But Hogan had found
two distinct truck-driver profiles. The top city performers are
social and gregarious, great with customers--which makes sense,
because they pick up and drop off multiple times a day. The best
line-haul drivers are quiet and introspective--which is good for
people who never see a customer. Noel has adjusted her hiring now,
having candidates take the Hogan assessment to find the best job for
them. Turnover for drivers has fallen to 22 percent (the industry
average is 116 percent). "You just think a driver is a driver, and
that's not true," Noel says. "We just didn't look at that part of
the hiring process enough."

Discussing the results of assessment tests with candidates--or even
giving them the full report--is increasingly popular. "The trend has
really been to lay it all on the table between the second and third
interviews," says James Hazen. This gives candidates the chance to
explain themselves, gives the interviewer a chance to address weak
spots, and, if someone is hired, points out ways he or she might
best be managed.

There are, by some estimates, 2,500 employment tests on the market.
One of the biggest mistakes companies make is using the wrong test.
A classic example is the Myers-Briggs Type Indicator, that
ubiquitous test that sorts people into 16 personality categories.
Myers-Briggs, a test created by a Pennsylvania woman who was
fascinated by how her merry personality differed from that of her
straightforward husband, has a weak record of predicting job
success. Indeed, its publisher warns that "It is unethical and in
many cases illegal to require job applicants to take the Indicator
if the results will be used to screen out applicants."

With so many tests available, it's not a surprise that employers use
tests meant for other purposes, like Myers-Briggs (which is fine, by
the way, for employee development), or even design their own tests.
But choosing the wrong one can mean dismissing qualified candidates
and even getting sued for discrimination. Employers need to know
whether a test is appropriate for hiring, what it measures, and how
it's designed, along with making sure it's legal. Psychologists
evaluate a psychological test by two measures, called reliability
and validity. Reliability examines whether items that supposedly
measure the same thing (agreeableness, say, or conscientiousness)
correlate highly with one another. Validity asks, in this case, for
proof that scores on tests are related to success in specific jobs.
"If you go out on the Net and look at the hundreds of tests out
there, a very small percentage have validity data," says Seymour
Adler, a senior vice president at Aon Consulting and a teacher of
organizational psychology at New York University.Recent psychological
research supports going beyond validity and
reliability data. First, both for legal purposes and to ensure
usefulness, make certain the test is designed for selecting--as
distinct from developing or training--employees. It should be
created or adapted for the workplace, not for clinical or medical
diagnosis. Pre-employment tests are more predictive when they
compare an individual's score against a group (they use "normative"
scales, in the lexicon) instead of just presenting it on its own
("ipsative" scales). For the best results, too, employers should
continue to evaluate and revalidate the tests within their companies
to make sure they are still predicting top performers.

A note about testing for hourly employees. There, employers might
care most about who's punctual and honest. Rock Bottom Restaurants,
a 29-store chain based in Louisville, Colorado, switched three years
ago from a pencil-and-paper application for its hourly employees to
a test from Unicru. (Kenexa and PreVisor are two other assessment
companies focusing on entry-level and hourly applicants.) For
waiters, it tests for sociability and team orientation; for the back
of the house, it asks applicants whether they've worked in
on-their-feet jobs before; for all job candidates, it looks at
integrity. Applicants in each pool--cooks, bartenders, and so
on--are ranked according to their assessment scores, which gives the
Rock Bottom management a good starting point. "It's not 100 percent
>predictive, and that's why we interview people, but it's at least an
>indicator," says Ted Williams, senior vice president of the brewery
>division at Rock Bottom. Rock Bottom's turnover for its 6,000 hourly
>employees has dropped by 20 percent, which Williams thinks is largely
>because of the system.
>
>
>Step 3
>
>
>
>
>
>In which the process starts to imitate finding World War II spies
>
>
>
>In 1943, a pretty countryside residence in Fairfax, Virginia, was renamed
>Station S and repurposed as a testing site for Office of Strategic Services
>recruits. In an atmosphere of intense secrecy--candidates were stripped of
>their clothes and given military fatigues, then driven in a windowless van
>to Fairfax, where they would invent a cover story and fake name--the OSS
>studied their performance during job simulations. One test had "couriers"
>giving candidates a map, which they'd need to memorize in eight minutes.
>Other exercises included interrogating ersatz prisoners of war, devising
>propaganda plans, and recovering papers from an agent's room (and,
>aggravatingly, getting interrupted by a rifle-wielding "German" midway).
>The tests went on for three and a half days.
>
>Inspired by that work-based approach, corporations such as AT&T starting
>using assessment centers to select executives. By the late 1950s, the
>candidate in the gray flannel suit was performing in-basket assessments in
>which he'd be graded on how he handled a set of letters, papers, tasks, and
>telephone calls that mimicked what he'd get on the job.
>
>Today's work samples are essentially updates of those AT&T tests. Work
>samples are a proven predictor of success and can be simple to arrange. A
>company can design its own by laying out the criteria for a job and asking
>a candidate to perform a task based on those criteria. For example:
>"Explain how you would sell this product to Target, step by step," or "Tell
>me how you'd improve these lines of C++ code."
>4 Number of weeks capital H Group dedicates to hiring a single consultant
>
>At Sterling Communications, a technology PR firm in Los Gatos, California,
>CEO Marianne O'Connor knows her account reps have to be good at
>understanding technical information, at figuring out how to pitch to a
>media outlet, and at writing. Logical enough. So she's started giving job
>candidates a two-hour test before she even meets with them. It describes a
>client's technology, identifies a target publication and its readership,
>and asks a candidate to distill the salient technical points and write a
>pitch to the magazine. Three staffers review the pitch, and that decides
>whether the candidate will get an interview. "If they can't write in my
>business, it's not going to work," O'Connor says.
>
>On the complicated end of the work-sample spectrum, Seymour Adler, the Aon
>Consulting psychologist, has created a four-hour online exercise called
>Leader, which Motorola and other companies use to test would-be executives.
>Candidates see an in box with e-mails that came in the night before, answer
>phone calls and listen to voice mails, and have access to reports and
>research. They're asked to tackle tasks like ones they would see on the
>job, such as solving a conflict between two underlings or leading a team of
>workers in creating a presentation for the CEO. At the end, Adler's team
>assesses the candidates on whatever areas the company is curious
>about--decisiveness, leadership, and so forth--and issues a report to the
>company. A company called Development Dimensions International offers
>similar exercises; these take place at one of its 75 assessment centers
>rather than online. Half-day and full-day job simulations cost from $4,000
>to $12,000.
>
>
>And finally...
>
>
>
>
>
>Put it all together-- without riling your candidates
>
>
>
>Dan Weinfurter runs Capital H Group, a human resources consulting firm in
>Chicago, though he's not an HR guy but an entrepreneur at heart. He founded
>the accounting and consulting firm Parson Group, which hit No. 1 on the
>Inc. 500 in 2000 with a four-year growth rate
of 27,992 percent, and sold it four years ago for $55 million.
Before that, he was second in command at Alternative Resources, an
IT staffing company that was a two-time Inc. 500 honoree. For all he
knew about running a company, however, Weinfurter came to the
conclusion that he didn't know much about hiring. "I thought I was
pretty good at interviewing," he says, "but I was no better, and
maybe was worse, than other people. If you're just going through it
and trying to guess, you'll guess right some of the time. But you
won't be able to guess right often enough to grow a business from scratch."

So at Capital H, he unleashed his on-staff psychologists, who
created a hiring system that's a textbook example of the latest
hiring research. Let's say Capital H has an opening for a
consultant. A group of candidates are interviewed by telephone by
the HR manager (or by Weinfurter himself, if the position is very
senior), and candidates with appropriate skills and backgrounds are
then passed to a local office to meet with local executives. He or
she takes the Watson-Glaser Critical Thinking Appraisal, a popular
and well-validated cognitive-ability test, and the Devine Inventory,
which measures the applicant's traits and tendencies against those
of existing Capital H consultants. (See
"<http://www.inc.com/magazine/20060801/hiring-sample-test.html>Let's
Turn the Tables" for a sample of questions from Watson-Glaser.)
About one in four candidates are then flown to Chicago headquarters,
where they spend a full day in behavioral interviews with multiple
executives. Finally, applicants are asked to choose a presentation
they've done in the past and give that to a group of Capital H execs
back at the local office in a work-sample exercise. The executives
discuss the candidates until they reach consensus.

Weinfurter figures he spends up to four weeks, and tons of his
workers' billable hours, per interview. But he estimates the cost of
hiring a bad consultant can be in the millions, considering not just
salary but also missed sales and lost clients. "I think the hiring
process is the most important process in business, but it's probably
the least disciplined in terms of how it's executed across American
business," he says.
People who study hiring, and business owners who are passionate
about the subject, love to see systems like Capital H's. Candidates
may not feel the same way. Certainly you'll have to make concessions
in some cases--say you're trying to recruit a CFO from a rival
company. "If they've already done a job like this, what's the point
of the test? It's not obvious you want to give this to everyone and
for every job," Peter Cappelli at Wharton notes. In every case,
candidates will have a better attitude toward the process, and the
company, if they believe that the hiring methods are respectful,
fair, and smart. So use appropriate cognitive tests--don't ask
accountants basic math questions. Use only tests designed for the
workplace, so that the questions clearly deal with business
situations and seem relevant. And explain why you're adopting an
approach that to some candidates will seem overwrought: to be fair
and quantitative.

There will always be skeptics about this approach to hiring, people
who believe their gut tells them more than any structured interview
or test could. And while Bill Vogt or Denise Noel or Dan Weinfurter
could offer testimonials about the new science of hiring, the point
is not that this system has worked in a handful of cases. It's that
hundreds of studies have confirmed that testing and structured
interviews do a much better job at finding good workers than do
regular interviews. Given that, the gut-feel proponents start to
seem like people who eschew antibiotics in favor of good
old-fashioned bloodletting.

Maybe people don't like to believe that something as crucial to a
business as hiring can be reduced to a series of processes. After
all, we rely on feeling and judgment to get through our lives,
whether to fall in love, keep safe on dark streets, or assess
business partners. This science-based approach isn't perfect. It
won't anoint every superstar, and it won't bar the door to all of
the mediocre players. What it will do is give employers a fuller,
more balanced, and fairer view of candidates, and give them a much
better shot at hiring the best people. It's still up to employers to
make the call on whether to hire or to pass, and that's where
feeling and judgment still play a part. But that part now comes
after employers have gathered all of the facts.
Stephanie Clifford is a
staff writer.----------Copyright © 2006 Mansueto Ventures LLC. All rights
reserved.
>Inc.com, 375 Lexington Avenue, New York, NY 10017.
-------------- next part --------------
Thew Science of Hiring
Care to dramatically enhance your chance of finding great employees? Trade
in your gut instincts for a systematic approach to>interviewing, testing,
and evaluating job candidates.>From:
< http://www.inc.com/magazine/20060801/Inc http://www.inc.com/magazine/20060801/Inc
. Magazine, August
2006 | By: Stephanie Clifford
----------
What was her company missing? Susan Bowman asked herself that as
soon as she plopped into her chair at Tri-anim, a medical-supplies
distributor in Sylmar, California. It was two and a half years ago.
Bowman had just joined the company as head of human resources, and her
highest priority was improving the company's hiring. When she arrived, the
HR department was basically shut out of the hiring of
sales people. Bowman wanted to make it more useful, especially after she
noticed some hires were fantastic and others were disappointments.
What Tri-anim was missing--and Bowman fortunately recognized this--was
something most employers in America have been missing: Conventional job
interviews don't work.>A typical interview--unstructured, rambling,
unfocused--tells the
interviewer almost nothing about job candidates, other than how they
seem during a couple of meetings in a conference room. But what are
these people like late at night and under pressure? What motivates
them? How smart are they? Have they handled tough projects? Do they
prefer working alone or are they better with a team? Regular
interviews assess barely any of this, and in fact are miserable
predictors of job success. In technical terms, they have a .2
correlation with predicting success.
Discouraging, isn't it? It would be--except that industrial and
organizational psychologists are on the job, seeking the best ways
to evaluate job candidates. A focused three-part approach can make
the hiring process as standardized and objective as possible--and
can help predict the best performers. The system starts with what is
called behavioral interviewing, in which candidates are barraged with tough
questions about how they've handled specific assignments
and problems. Bluffing becomes close to impossible, and the process
is based on facts, not feelings. Interviewing is followed by two
kinds of tests: cognitive tests, which measure intellectual ability,
and personality tests, which are now sophisticated enough that
companies can directly compare candidates with their top performers.
The third step is asking candidates to do tasks like the ones they'd
do on the job.
Most employers will recite over and over that people are the secret to their
success--and given that turnover costs about 1.5 times the
salary of the employee who moves on, according to
PricewaterhouseCoopers, they'd better mean it. But it's astounding how few
companies bother with more than improvised,
all-but-meaningless interviews to hire their people. "This is a
topic that's been researched to death by the field of industrial and
organizational psychology," says Peter Cappelli, management
professor and director of the center for human resources at the Wharton
School of the University of Pennsylvania. "The amazing thing is how few
companies take this seriously. It's kind of mind-boggling
that they would undertake such huge investments and not pay attention to
what we know about how to pick out the people who are going to be best."
Susan Bowman had been studying some of this research. She was pleased to see
that Tri-anim had been using the testing company PSI to assess candidates
for some positions. She was less pleased that the test criteria hadn't been
updated in six years and that some of the company's hiring managers didn't
use the tests. Bowmanimmediately had PSI reassess the best and worst
performers in a number of areas and develop profiles of the top performers.
The goal is to compare candidates with the ideal. Tri-anim sales people, for
example, need to be not just energetic and detail-oriented (pretty
common in sales people) but also unusually independent: They spend a
lot of time alone.
Bowman began requiring the PSI assessments as a last step in the managerial,
IT, and sales hiring processes. They've already turned up surprising
results. Recently, a recruiter and a manager were
disagreeing over two candidates for a position--until the PSI reports came
back. "The results were really staggeringly different.
It was a combination of not only skill sets, but that one
individual's people skills were so much lower than the manager had
anticipated and the other candidate scored much higher," Bowman says.
She has now trained all of Tri-anim's hiring managers in behavioral
interviews. "Structured interviews with behaviorally based questions
really allow us to drill down," she says. In a daylong session, the
managers learned the tenets of behavioral interviews and practiced
asking open-ended questions. Though she doesn't use work
assessments--and that could increase the company's hiring success
even further--these two steps paint rich, objective portraits of
candidates. Even the sales hiring managers, who didn't want to
abandon their random interviewing tactics, have become believers as
turnover has dropped. "We all want to hire the best," Bowman says. "This
gives really good, objective information that allows the
manager to take the halo off the applicant."
Step 1
In which the bored interviewer turns intrepid interrogator
Other than people's wan complexions beneath fluorescent office
lights, there's not much that's consistent in typical job
interviews. Topics discussed completely depend on the interviewer,
who might spend an hour discussing a candidate's alma mater, the
recent weather, or even himself. He could dismiss the candidate
before she's even started speaking because she's overweight or
overdressed, or he could lose focus because he's having a rotten
day. Afterward, the interviewer is left with a resume and a vague sense
of...how the candidate acts during an interview. Is she
qualified? Dunno, but her resume looks nice. Would she be good at
the job? Well, she likes to sail, which is fun..2  Correlation between
conventional interviewing and successful hiring
As psychologists have pointed out, traditional interviews produce a
subjective, acutely narrow view of a job candidate. That view is
likely biased--studies have shown interviewers tend to prefer
candidates similar to them, judge candidates on fewer criteria than
they think they're judging them on, and tend to let biases about
matters like race and gender get in the way. "Everybody thinks
they're much better interviewers than they are," says Ben Dattner, a
New York City industrial and organizational psychologist.
Still, the interview is a brilliant tool if you make certain changes
to it. Behavioral interviews have almost triple the correlation of
conventional interviews with job success. (To gauge if a hire is
successful, academics use measures like the dollar value of an
employee's contribution to the company, his or her relative share in
overall output, and later performance reviews, promotions, and
raises.) Behavioral interviewing involves, by definition, a group of
interviewers defining qualities needed for a job, asking candidates
to give past examples of how they've demonstrated those qualities,
asking the same questions of each candidate, and taking notes
throughout. The premise is that what someone has done in past jobs
is a superior indicator of what he or she will do in future jobs.
It's the same idea behind checking references.
To see how structured interviews work, take a look at Hope Lumber &
Supply, where HR chief Bill Vogt credits much of his company's
growth to behavioral interviewing. Hope, which is based in Tulsa,
brings in $1.2 billion a year selling building supplies to
contractors. Eight years ago, when the company was making a fifth of
that, Vogt and the owners predicted, correctly, that the housing
market was about to surge. If they hired the right managers, they
could ride that wave.
Following behavioral-interviewing maxims, Vogt starts by talking to
people intimate with the job and deciding what qualities are
necessary for it. He has a standard template for what he wants in
managers: leadership, a drive to make money for the company and for
themselves, ambition, and past operational responsibility. Depending
on the challenges of the specific business unit, he'll alter the template.
Then he comes up with open-ended questions that get at the desired
qualities. Behavioral interviews use questions that are rooted in
the past--"Tell me about a time when"--rather than
hypotheticals--"What would you do if?" Vogt digs deep into his
candidates' work experience. "I get into the current operation," he
says. "What did you inherit? What were the sales margins, accounts
payable, percent current status, inventory like? What did you do with that,
what did you achieve? Clearly, we're looking for
achievers and winners and people very knowledgeable of their
operation." Specific questions like these, in addition to assessing
candidates' skills, combat resume fraud--it's pretty difficult to
lie about sales margins and inventory turns.
>Ideally, a team of people will meet with the candidate. That
minimizes the importance of any one person's reaction, good or bad.
Vogt arranges a panel interview for general questions, and then sets
up one-on-one interviews focused on specific areas. Vogt asks about EEOC
compliance and OSHA incidents; the CFO asks about accounting
details; the COO asks logistics questions. In any behavioral
interview, questions should be job-related, to keep the interview
relevant and to avoid discrimination complaints. To the extent
possible, every candidate should be asked the same questions.
Interviewers should take notes, and should get together to discuss
their views just after the candidate leaves.
Step 2
>
In which the candidate relives college-entrance tests
As helpful as behavioral interviews are, they're even more effective
when combined with employment tests, many of which are now
administered online. These are given to candidates to assess either
cognitive abilities (cognitive tests are filled with SAT-like verbal
and math questions) or personality traits (personality tests include
preferential questions like "Would you rather spend a night at home
alone than go to a crowded party?" or biographical questions like
"Were you a class officer in high school?"). While cognitive tests
have a slightly closer correlation with job success, personality
tests are useful both as a basis for interview questions and for
subsequent development. For the best results, companies should use
both sorts of tests or a single test that combines the two elements.
(For a roster of tests, see
"< http://www.inc.com/magazine/20060801/hiring-test-types.htmlChoose http://www.inc.com/magazine/20060801/hiring-test-types.htmlChoose
Your Weapon".)
Many testing companies today can do impressive comparisons of
candidates against existing employees--the goal being to essentially
clone top performers. "The assessments allow you to really identify
what is different between our stars and our slugs," says James
Hazen, an organizational psychologist and the owner of Applied
Behavioral Insights, a consulting firm based in Wexford,
Pennsylvania. Hazen uses several tests with his clients.
2,500 Number of cognitive and personality tests on the market
Assessments can turn up some fascinating findings. Dayton Freight
Lines, a trucking company based in Dayton, Ohio, had been having
trouble with drivers. Customers reported that some drivers were
rude. Some drivers were complaining over their CB radios. Some
workers' productivity was falling, or they were late on their
deliveries. Denise Noel, the director of quality at Dayton Freight,
was stumped. These drivers all had good qualifications and had
interviewed well, yet she saw no way to predict who would be an
outstanding performer on the road. Finally she brought in a company
called Hogan Assessment Systems and had the company present its
extensive research on truck drivers.
Noel had assumed all truck drivers were similar. But Hogan had found
two distinct truck-driver profiles. The top city performers are
social and gregarious, great with customers--which makes sense,
because they pick up and drop off multiple times a day. The best
line-haul drivers are quiet and introspective--which is good for
people who never see a customer. Noel has adjusted her hiring now,
having candidates take the Hogan assessment to find the best job for
them. Turnover for drivers has fallen to 22 percent (the industry
average is 116 percent). "You just think a driver is a driver, and
that's not true," Noel says. "We just didn't look at that part of
the hiring process enough."
Discussing the results of assessment tests with candidates--or even
giving them the full report--is increasingly popular. "The trend has
really been to lay it all on the table between the second and third
interviews," says James Hazen. This gives candidates the chance to
explain themselves, gives the interviewer a chance to address weak
spots, and, if someone is hired, points out ways he or she might
best be managed.
There are, by some estimates, 2,500 employment tests on the market.
One of the biggest mistakes companies make is using the wrong test.
A classic example is the Myers-Briggs Type Indicator, that
ubiquitous test that sorts people into 16 personality categories.
Myers-Briggs, a test created by a Pennsylvania woman who was
fascinated by how her merry personality differed from that of her
straightforward husband, has a weak record of predicting job
success. Indeed, its publisher warns that "It is unethical and in
many cases illegal to require job applicants to take the Indicator
if the results will be used to screen out applicants."
With so many tests available, it's not a surprise that employers use
tests meant for other purposes, like Myers-Briggs (which is fine, by
the way, for employee development), or even design their own tests.
But choosing the wrong one can mean dismissing qualified candidates
and even getting sued for discrimination. Employers need to know
whether a test is appropriate for hiring, what it measures, and how
it's designed, along with making sure it's legal. Psychologists
evaluate a psychological test by two measures, called reliability
and validity. Reliability examines whether items that supposedly
measure the same thing (agreeableness, say, or conscientiousness)
correlate highly with one another. Validity asks, in this case, for
proof that scores on tests are related to success in specific jobs.
"If you go out on the Net and look at the hundreds of tests out
there, a very small percentage have validity data," says Seymour
Adler, a senior vice president at Aon Consulting and a teacher of
organizational psychology at New York University.Recent psychological
research supports going beyond validity and
reliability data. First, both for legal purposes and to ensure
usefulness, make certain the test is designed for selecting--as
distinct from developing or training--employees. It should be
created or adapted for the workplace, not for clinical or medical
diagnosis. Pre-employment tests are more predictive when they
compare an individual's score against a group (they use "normative"
scales, in the lexicon) instead of just presenting it on its own
("ipsative" scales). For the best results, too, employers should
continue to evaluate and revalidate the tests within their companies
to make sure they are still predicting top performers.
A note about testing for hourly employees. There, employers might
care most about who's punctual and honest. Rock Bottom Restaurants,
a 29-store chain based in Louisville, Colorado, switched three years
ago from a pencil-and-paper application for its hourly employees to
a test from Unicru. (Kenexa and PreVisor are two other assessment
companies focusing on entry-level and hourly applicants.) For
waiters, it tests for sociability and team orientation; for the back
of the house, it asks applicants whether they've worked in
on-their-feet jobs before; for all job candidates, it looks at
integrity. Applicants in each pool--cooks, bartenders, and so
on--are ranked according to their assessment scores, which gives the
Rock Bottom management a good starting point. "It's not 100 percent
>predictive, and that's why we interview people, but it's at least an
>indicator," says Ted Williams, senior vice president of the brewery
>division at Rock Bottom. Rock Bottom's turnover for its 6,000 hourly
>employees has dropped by 20 percent, which Williams thinks is largely
>because of the system.
>
>
>Step 3
>
>
>
>
>
>In which the process starts to imitate finding World War II spies
>
>
>
>In 1943, a pretty countryside residence in Fairfax, Virginia, was renamed
>Station S and repurposed as a testing site for Office of Strategic Services
>recruits. In an atmosphere of intense secrecy--candidates were stripped of
>their clothes and given military fatigues, then driven in a windowless van
>to Fairfax, where they would invent a cover story and fake name--the OSS
>studied their performance during job simulations. One test had "couriers"
>giving candidates a map, which they'd need to memorize in eight minutes.
>Other exercises included interrogating ersatz prisoners of war, devising
>propaganda plans, and recovering papers from an agent's room (and,
>aggravatingly, getting interrupted by a rifle-wielding "German" midway).
>The tests went on for three and a half days.
>
>Inspired by that work-based approach, corporations such as AT&T starting
>using assessment centers to select executives. By the late 1950s, the
>candidate in the gray flannel suit was performing in-basket assessments in
>which he'd be graded on how he handled a set of letters, papers, tasks, and
>telephone calls that mimicked what he'd get on the job.
>
>Today's work samples are essentially updates of those AT&T tests. Work
>samples are a proven predictor of success and can be simple to arrange. A
>company can design its own by laying out the criteria for a job and asking
>a candidate to perform a task based on those criteria. For example:
>"Explain how you would sell this product to Target, step by step," or "Tell
>me how you'd improve these lines of C++ code."
>4 Number of weeks capital H Group dedicates to hiring a single consultant
>
>At Sterling Communications, a technology PR firm in Los Gatos, California,
>CEO Marianne O'Connor knows her account reps have to be good at
>understanding technical information, at figuring out how to pitch to a
>media outlet, and at writing. Logical enough. So she's started giving job
>candidates a two-hour test before she even meets with them. It describes a
>client's technology, identifies a target publication and its readership,
>and asks a candidate to distill the salient technical points and write a
>pitch to the magazine. Three staffers review the pitch, and that decides
>whether the candidate will get an interview. "If they can't write in my
>business, it's not going to work," O'Connor says.
>
>On the complicated end of the work-sample spectrum, Seymour Adler, the Aon
>Consulting psychologist, has created a four-hour online exercise called
>Leader, which Motorola and other companies use to test would-be executives.
>Candidates see an in box with e-mails that came in the night before, answer
>phone calls and listen to voice mails, and have access to reports and
>research. They're asked to tackle tasks like ones they would see on the
>job, such as solving a conflict between two underlings or leading a team of
>workers in creating a presentation for the CEO. At the end, Adler's team
>assesses the candidates on whatever areas the company is curious
>about--decisiveness, leadership, and so forth--and issues a report to the
>company. A company called Development Dimensions International offers
>similar exercises; these take place at one of its 75 assessment centers
>rather than online. Half-day and full-day job simulations cost from $4,000
>to $12,000.
>
>
>And finally...
>
>
>
>
>
>Put it all together-- without riling your candidates
>
>
>
>Dan Weinfurter runs Capital H Group, a human resources consulting firm in
>Chicago, though he's not an HR guy but an entrepreneur at heart. He founded
>the accounting and consulting firm Parson Group, which hit No. 1 on the
>Inc. 500 in 2000 with a four-year growth rate
of 27,992 percent, and sold it four years ago for $55 million.
Before that, he was second in command at Alternative Resources, an
IT staffing company that was a two-time Inc. 500 honoree. For all he
knew about running a company, however, Weinfurter came to the
conclusion that he didn't know much about hiring. "I thought I was
pretty good at interviewing," he says, "but I was no better, and
maybe was worse, than other people. If you're just going through it
and trying to guess, you'll guess right some of the time. But you
won't be able to guess right often enough to grow a business from scratch."
So at Capital H, he unleashed his on-staff psychologists, who
created a hiring system that's a textbook example of the latest
hiring research. Let's say Capital H has an opening for a
consultant. A group of candidates are interviewed by telephone by
the HR manager (or by Weinfurter himself, if the position is very
senior), and candidates with appropriate skills and backgrounds are
then passed to a local office to meet with local executives. He or
she takes the Watson-Glaser Critical Thinking Appraisal, a popular
and well-validated cognitive-ability test, and the Devine Inventory,
which measures the applicant's traits and tendencies against those
of existing Capital H consultants. (See
"< http://www.inc.com/magazine/20060801/hiring-sample-test.html>Let's http://www.inc.com/magazine/20060801/hiring-sample-test.html>Let's
Turn the Tables" for a sample of questions from Watson-Glaser.)
About one in four candidates are then flown to Chicago headquarters,
where they spend a full day in behavioral interviews with multiple
executives. Finally, applicants are asked to choose a presentation
they've done in the past and give that to a group of Capital H execs
back at the local office in a work-sample exercise. The executives
discuss the candidates until they reach consensus.
Weinfurter figures he spends up to four weeks, and tons of his
workers' billable hours, per interview. But he estimates the cost of
hiring a bad consultant can be in the millions, considering not just
salary but also missed sales and lost clients. "I think the hiring
process is the most important process in business, but it's probably
the least disciplined in terms of how it's executed across American
business," he says.
People who study hiring, and business owners who are passionate
about the subject, love to see systems like Capital H's. Candidates
may not feel the same way. Certainly you'll have to make concessions
in some cases--say you're trying to recruit a CFO from a rival
company. "If they've already done a job like this, what's the point
of the test? It's not obvious you want to give this to everyone and
for every job," Peter Cappelli at Wharton notes. In every case,
candidates will have a better attitude toward the process, and the
company, if they believe that the hiring methods are respectful,
fair, and smart. So use appropriate cognitive tests--don't ask
accountants basic math questions. Use only tests designed for the
workplace, so that the questions clearly deal with business
situations and seem relevant. And explain why you're adopting an
approach that to some candidates will seem overwrought: to be fair
and quantitative.
There will always be skeptics about this approach to hiring, people
who believe their gut tells them more than any structured interview
or test could. And while Bill Vogt or Denise Noel or Dan Weinfurter
could offer testimonials about the new science of hiring, the point
is not that this system has worked in a handful of cases. It's that
hundreds of studies have confirmed that testing and structured
interviews do a much better job at finding good workers than do
regular interviews. Given that, the gut-feel proponents start to
seem like people who eschew antibiotics in favor of good
old-fashioned bloodletting.
Maybe people don't like to believe that something as crucial to a
business as hiring can be reduced to a series of processes. After
all, we rely on feeling and judgment to get through our lives,
whether to fall in love, keep safe on dark streets, or assess
business partners. This science-based approach isn't perfect. It
won't anoint every superstar, and it won't bar the door to all of
the mediocre players. What it will do is give employers a fuller,
more balanced, and fairer view of candidates, and give them a much
better shot at hiring the best people. It's still up to employers to
make the call on whether to hire or to pass, and that's where
feeling and judgment still play a part. But that part now comes
after employers have gathered all of the facts.
Stephanie Clifford is a
staff writer.----------Copyright © 2006 Mansueto Ventures LLC. All rights
reserved.
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