The Hidden Reason New Hires Underperform

As part of our Quality of Hire initiative working with companies around the world on implementing Performance-based Hiring, I always ask hiring managers if they would hire someone who met the following criteria:

  • The person has a track record of accomplishments comparable in scope, scale and size to what’s required to be successful in the new role.
  • There is clear evidence the person’s performance has been consistently in the top half of his/her peer group throughout the bulk of the person’s career.
  • The person has been assigned to participate and lead important teams similar in scope and makeup to the actual job requirements.
  • The person has the capacity and track record for solving comparable job-related problems and making complex business decisions likely to be faced on the job.

The hiring managers in these training classes always agree they’d hire someone who met this criteria. These factors are shown in the top of the graphic below.

I then suggest that if a person is evaluated based on past performance doing comparable work and he/she has been successful based on the above criteria, the person obviously has the right mix of skills and experiences required. Some of those hired will have more. Some will have less. But in most, if not all, cases this mix will be different than what’s written on the original job description. In fact, the best people will have less. That’s why they’re the best people – they accomplish more with less. And diverse candidates by definition will have a much different mix of skills and experiences. That’s what makes them diverse candidates.

I conduct this back-and-forth discussion to prove that filtering people on having some arbitrary set of skills and experiences is the second worst possible thing companies can do to find and hire strong people.

Instead they should first define the work that needs to be done, the teams the new person will lead and work with and the problems and decisions the person needs to make to be successful. Then they need to find people who are both competent and motivated to do this work. This is how you hire stronger, self-directed team players who meet their performance objectives year-in and year-out.

The hiring managers in these training classes always agree this is a far better way to find and interview job candidates.

However, once I get this agreement, I say it’s not enough for evaluating the person’s likely success in the new job. Something very, very big is missing. And in most hiring decisions, it’s missed most of the time.

Competency is Not Enough. Job Fit is the Key to Making Better Hiring Decisions.

The short term for what’s missing is job fit: fit with the job, fit with the hiring manager and fit with the environment.

Job fit relates to work the person finds intrinsically motivating. If the person is not naturally motivated to do the work required, he/she will need too much direction and will likely underperform.

Managerial fit relates to how the person needs or wants to be managed and how well this matches to how the hiring manager manages and develops people. If the hiring manager’s style clashes with how the person wants to be managed, he/she will quickly become demotivated.

Environmental fit relates to the culture and pace of the organization. If the person can’t deal with the pace, how decisions are made, the politics of the organization and the depth of resources available, the person will underperform.

In the rush to hire, or to get an offer and accept it, these long-term fit factors are typically ignored or superficially assessed. Often they’re never even defined. Worse, they’re assessed based on some casual conversation based on communication skills, affability, first impressions and/or some superficial DISC-like test that overvalues preferences for true intrinsic motivation. A better approach is to first discard reliance on skills- and experience-infested job descriptions and replace these with performance-based job descriptions that define the work as a series of 5-6 critical performance objectives. As part of this define all of the fit factors emphasizing the hiring manager’s style, especially if it’s odd, extreme or quirky.

During the interview dig into the candidate’s major performance accomplishments and get evidence the work that needs to be done maps to work the candidate finds intrinsically motivating. Then determine the impact the hiring manager had on the person’s performance and the environment where the person thrived. Collectively, this is how you should evaluate people. Done properly, you’ll raise quality of hire, improve on-the-job performance, increase job satisfaction and reduce turnover.

Candidates need to reverse engineer this advice by asking interviewers to define the work that needs to be done, the company environment and the hiring manager’s leadership style. Then they need to provide examples of work they’ve done that best matches these needs. Most important is to not accept offers based on compensation, convenience or to meet some short-term needs. Making long-term decisions using this type of short-term criteria is a sure fire recipe for making the wrong career decision.

I’m now working with Harvard professor Todd Rose, the author of The End of Average, on developing techniques to better predict on-the-job performance. So far, it’s clear the fit factors are the most important. It’s equally clear they’re the ones rarely assessed properly.

Why Good People Underperform

As I headed to LinkedIn’s Talent Connect recruiting industry confab last week with more than 4,000 of the world’s best recruiters and talent leaders, someone tweeted me this headline:

Why Lou Adler is Wrong About Personality Assessment Tests

As I was leaving the conference a Talent Leader from a Fortune 200 company strong-armed me and said something strange. It went something like, “While we’ve aced our pre-hire quality of hire assessments, we’re struggling with improving quality of hire.”

That’s why I’m not wrong about pre-hire personality assessment tests. If they don't predict quality of hire they are valueless.

Good people don’t underperform due to the wrong personality, the wrong behaviors or some Quixotic definition of culture fit or lack of intelligence or weak team or technical skills. They underperform for one or more of the following reasons:

  • They’re not motivated to do the actual work required since the job they’re being asked to perform after being hired was ill-defined before they were hired.
  • Being competent to do something is not the same as being motivated to do it.
  • Being motivated to get a job is not the same as being motivated to do the job.
  • The interview focused on assessing competencies, behaviors and depth of skills that only weakly map to the actual work required to be done.
  • The hiring manager and candidate don’t work too well together.
  • While actual cultural fit is very important, few managers or recruiters understand what this means and how to measure it properly.

That’s why I’m not wrong about pre-hire personality assessment tests. Nor am I wrong about the continued use of flawed and ill-advised OD interviewing and assessment tests that put people into large groups and expect to hire perfect androids who will fit all jobs for all occasions.

Here’s my simpleminded alternative.

  1. Recognize that there are two job markets. One offers ill-defined lateral transfers; the other offers career moves. People in the career job market won’t take assessment tests nor will they underperform if properly assessed. This huge barrier-to-entry is why I really don’t like these tests. However, even if they’re reasonably good confirming indicators of performance they're only mildly predictive.
  2. Emphasize passive candidate recruiting since these candidates represent 85% of the entire talent market. But they’re only open to consider career moves.
  3. Drop transactional hiring and recruiting practices. Instead use a consultative recruiting process focusing on matching a person’s motivating needs with the real job, the real manager and the actual culture.
  4. A career move must provide a minimum 30% non-monetary increase. This is the sum of job stretch, job growth and a richer mix of more satisfying work.
  5. Use a performance-based job description to define the real work, not one infested with skills.
  6. Use comparable results as the primary means to assess pre-hire quality, motivation and cultural fit. Here’s a super quick summary of the Performance-based Interview process I recommend.
  7. Redefine your culture. Most of a company’s culture is determined by the pace of the organization, the quality and depth of its decision-making process, the flexibility of its infrastructure, its strategy and how well it’s doing in comparison to its competition. You need to match this part before you get into the idealism.
  8. Put compensation in the parking lot. If a person doesn’t find the job intrinsically satisfying, paying the person a salary premium will make things worse.
  9. Get the manager fit part right. Nothing else will matter otherwise.
  10. Make hiring managers formally accountable for the quality of the people they hire.
  11. If recruiters need to present more than four candidates for any open job something is wrong. It’s probably one of the first 10 items listed here.

Maybe assessment tests, competency modeling and behavioral interviewing can help separate the more qualified from the less qualified in a talent surplus environment. But quality of hire will not improve since these people are not being assessed on their fit with the actual job, the actual manager and the actual culture and business situation. In this case there’s a high probability these good people will underperform because the job is demotivating, the hiring manager’s style is demotivating or the culture was ill-defined.

That’s why I suggest recruiters and hiring managers define the real job and the real culture and offer real career moves. Recognize that a career move is not a lateral transfer with more money; it’s doing work that offers more stretch, more growth and more satisfaction. Assessment tests assess none of these things. That’s why I don’t like them.