According to a recent Gallup report, employee disengagement in the U.S. is at dismal 68%. This means that even if you hire someone, he or she probably won't like the job too much and will probably start look for another one as soon as possible. Or worse, they'll stay on the job and underperform.

I contend the problem is attributed to these four major reasons:

  • Lack of clarity around real job needs. If the hiring manager doesn’t clarify actual job expectations up front, the decision to hire someone will be based on the depth of the person’s technical depth, likability and interviewing skills.
  • The continued use of behavioral interviewing. Aside from being impersonal, focusing on generic behaviors ignores motivation to do the actual job in the exact circumstances required. This precludes the possibility of making an accurate assessment.
  • The use of gladiator voting to assess and compare candidates. The wisdom of the crowd is ineffective when the biggest thumb carries more weight and when it’s safer to vote no.
  • Emphasizing short-term benefits vs. long-term career opportunity. When what a person gets on Day 1 (a salary, title, vague responsibilities, location and company name) dominates the candidate’s acceptance decision, the actual job will likely turn out to be a disappointment.

One way to eradicate the problem is to use the Performance-based Hiring two-question interview in combination with our Quality of Hiring Talent Scorecard. Since we were the first search firm to offer a one-year guarantee on our placements, I developed these tools to ensure our candidates were hired for long-term reasons not short-term convenience. It worked - our first year fallout rate was barely 5%. As a result our clients then asked us to train all of their hiring managers in the process. (This PowerPoint template offers a step-by-step guide.) Since many companies started using it, we then had it fully validated by one of the top labor attorneys in the U.S. He give it two-thumbs up.

Here’s an overview of the Performance-based Hiring process:

  1. First prepare a performance-based job description. This defines the 6-8 key performance objectives a person in the job is expected to achieve in the first year. The purpose of the Performance-based Interview is to determine if the person has done comparable work in a similar environment with similar resources. If so, he or she has all of the skills and competencies needed.
  2. Conduct a thorough work-history review looking for the Achiever Pattern. A 20-30 minute review of the candidate’s resume is one of the most important aspects of the interview. Start by looking for general fit and the person’s major accomplishments in each job. Dig deeper looking for the Achiever Pattern indicating the person is in the top 25% of his or her peer group.
  3. Ask the Most Significant Accomplishment question many times. You’ll need to ask the candidate to describe a comparable accomplishment for each performance objective listed in the job description. Collectively, these get at past performance and the person’s trend of growth over time. This is shown in the graphic.
  4. Ask the Problem-Solving question once or twice. To assess thinking skills and upside potential the hiring manager needs to get into a give-and-take discussion finding out how the candidate would organize and implement a solution for the most important one or two performance objectives.
  5. Assess and compare candidates using the Hiring Formula for Success. We’ve found 10 factors that best predict a person’s ability to do the actual work under the actual circumstances. This Hiring Formula for Success is fully captured in our Quality of Hire Talent Scorecard.
  6. Conduct a formal debriefing session using evidence to make the decision. The talent scorecard combines all of the soft and hard skills needed to make an accurate assessment. As part of this, it’s essential that each interviewer shares actual evidence before the team ranks the candidate on each of the 10 factors. A wide variance of opinion indicates a flawed assessment.

Negotiating the offer is a critical part of the hiring process. To minimize the chance of underperformance, disengagement and unnecessary turnover, emphasize the size of the opportunity gap, not the compensation increase, to close the deal. You’ll quickly discover that the few extra hours required to hire the right person is more than offset by the few extra hours needed every week to manage the wrong person. As Red Scott said, “Hire smart, or manage tough.” Performance-based Hiring gives you the tools needed to hire smart.


Lou Adler (@LouA) is the CEO of The Adler Group, a consulting and training firm helping companies implement Performance-based Hiring. He's also a regular columnist for Inc. Magazine and BusinessInsider. His latest book, The Essential Guide for Hiring & Getting Hired (Workbench, 2013), provides hands-on advice for job-seekers, hiring managers and recruiters on how to find the best job and hire the best people. His new video program provides job seekers inside secrets on what it takes to get a job in the hidden job market.