Executives spend more time managing and making people decisions than on anything else. Yet, by and large, managers make poor promoting and hiring decisions. By most accounts, their batting average is no better than .333, which would be great for the owner of the Los Angeles Dodgers, but not so acceptable in most other aspects of business. It's no surprise that last year American business invested close to $500 billion in technology and systems and budgeted only 10 percent of that for people. Purchasing technology means knowing what to expect; yet expectations are rarely met from investments in people.
As far back as 1985, Peter Drucker was quoted in a Harvard Business Review article as saying, "Making the right people decisions is the ultimate means of controlling an organization well. Such decisions reveal how competent management is, what its values are, and whether it takes its job seriously." Fifteen years later, there may be only one aspect about the workplace that hasn't changed: the importance and value placed on people and our total lack of understanding in getting the people side of our businesses right. In order to have a sustainable, competitive advantage competent people must embody the organization.
The People Challenge
When a company invests in technology, equipment or systems, the research process can be exhaustive. Before the final decision is made, the buyer knows exactly what the products' capabilities are as well as the expected return on investment. In comparison, when we invest in people, it's often a coin toss whether the person will sink or swim.
Selecting and keeping the right people are much more critical today than ever before. Salaries, benefits and the associated taxes are typically one of the largest line items on a business' income statement, yet turnover, bad hires and poor performers are not seen on a balance sheet. In spite of this, today's managers are being held much more accountable for their hiring decisions, and greater efficiency and productivity are expected.
Companies simply cannot afford to select the wrong job candidate or lose their better employees, but they do. In fact, most managers claim to know within the first several weeks when they've made the wrong decision with a new hire or promotion. Yet they rarely address the issue immediately, and the bad decision gets worse before it gets better, typically for one of three reasons:
Managers don't want to admit they've made a mistake.
Managers believe the person will change.
Managers believe they are strong enough trainers to make up the difference.
In all three cases, they are simply chasing dreams until they're ready to face reality and fix the problem. The earlier the predicament is confronted, the less damage the organization will experience. This is especially true if the employee can be better matched elsewhere in the same organization.
Predicting Behavior Helps Predict Success
In a recent study, 100 CEOs were asked, "What percentage of your employees are truly awesome performers?" The answer was an average of 30 percent. For those CEOs whose answer was higher, they were asked a more important question: "To what do you attribute your success?" In virtually all cases, their answers included some form of behavioral testing. Stated simply, they knew how to predict behavior, therefore they knew how to predict success.
"Initially we used behavioral testing as a recruitment and assessment tool very successfully," explains Anthony Folan, manager of employee relations for Russell Metals, Inc., an American-Canadian company that employs over 2,000 people. "Then we asked existing employees to fill out the personality survey and got some excellent feedback on their strengths and development qualities. It was received very well," Anthony says.
More and more, behavioral consideration is making the difference for employers. "Given the extreme labor shortage, our goal is to keep turnover to a minimum," says Mark Gordon, Chief Energizing Officer at Synergy Networks, a company that designs, builds and maintains local area, wide area and metro area infrastructures. "The use of personality testing has been invaluable when it comes to making good hiring choices the first time. Today's workforce is increasingly nomadic and hiring without assessment testing would be like finding a needle in a haystack," says Gordon.
Assessing People Power
Workplace behavioral testing and a strategic application of the results offer an increasingly viable and effective tool in today's war for talent. By contrast, traditional methods for selecting and managing people are becoming increasingly less accurate. The truth is people rarely fail based on their skill sets or experience alone. More typically, failure is the outcome of matching the wrong personality with the wrong job.
Going back to Synergy Networks, Gordon refers to his experience hiring a Warehouse Manager. The company hired a candidate who would never have been considered if the conventional interview process were used. "He met almost none of the prerequisites, but the personality profile was an exact match, so we decided to rely on it," says Gordon, "and that same Warehouse Manager remains the best employee we've ever hired."
Candidates are typically selected based on appearance and qualifications, not personality profiles and behavioral capabilities. For example, hiring the right sales representatives is a very difficult job because they all interview so well. Typical classified ads list prerequisites that never really touch on the behavioral type of person the company seeks to hire. A company might be better served to publish an ad with behavioral prerequisites: "Looking for excellent sales closer who is both a self-starter and self-confident. Candidate will be rewarded based on results and must be looking for an independent environment." Education and experience are rarely the most critical elements to the selection process, yet the objectivity of the data makes it simple and safe for the decision-making process. In general, people don't reach success because of their skills as much as they do because of their personality.
Winning the Talent War: A Strategic Approach
The majority of workplace behavioral or personality assessment tests are similar. They can help determine the behavioral requirements for a specific job and compare those requirements with the personality profile of the applicant or the incumbent. What makes the major difference with behavioral assessments is how companies utilize them. While many use them exclusively for tactical application, their value far exceeds their use in the selection process. Equally, if not more importantly, they work well as strategic tools that excel when striving for more effective communication, greater hands-on management or for sharper insight into the specific needs of a company's most awesome performers. Good assessments generate this information and more, and forward thinking business owners can make it their challenge to use them to their fullest potential in winning the war for talent.
William F. Wagner is cofounder and CEO of Accord Management Systems, a firm that works to help companies get the "people side" of their business right. He is also a presenter, executive coach and facilitator who specializes in transferring his knowledge about people to others. For further information, call (805) 230-1010 or send an e-mail to firstname.lastname@example.org
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