Over the last two decades, the
chatter in HR circles has concerned “becoming more strategic” and “getting a
seat at the table.” However, a golden opportunity has been missed, as a linchpin
function of HR—one with a profound impact on the bottom line—has been largely
ignored. In 2002 Rynes, Colbert, and Brown[1]
conducted research to determine whether the beliefs of HR professionals were
consistent with established research findings on the effectiveness of various
HR practices. As it turns out, the area of greatest disconnect was in staffing (particularly
related to hiring assessments), where fewer than 50% of respondents were
familiar with prevailing research findings.
As we roll into 2015, the HR
chatter has turned to metrics, analytics, and big data. Yet again, though, personnel
selection is late to show up to the party. A 2014 Aberdeen study[2]
found that only 14% of businesses have data to show the business impact of their
assessment strategy. With payroll and benefits representing one of the largest
line items on virtually every company’s operating statement, effective
selection is one of the top areas where HR can have a significant impact on the
bottom line. It’s time for organizations to put hiring under the microscope.
Virtually everyone has acknowledged
the fact that getting the right people in the right jobs is critical to
business success. But how to get the “right”
people continues to elude many: I have talked with organizations that have
tried to incorporate everything from horoscopes to a deck of playing cards into
their selection process, all in a vain attempt at systematically identifying
which candidates have the best chance of becoming strong employees. I believe
the following steps will help HR improve the science of selection.
1) Clarity.
HR needs to think more
strategically about the desired outcomes of their selection systems.
“We want to
hire better people” is not a clear enough goal. What is it you are actually trying to
impact—turnover, retention, sales volume, customer satisfaction, morale,
productivity, theft, absenteeism, safety incidents, drug use in the workplace,
etc.? There are different assessment instruments designed specifically to
address these, and countless other, issues or goals. Once your objective is
clear, you can determine what constructs you can measure that will be
predictive of that outcome.
2) Validity.
Predictive validity should be a
driving factor (if not THE driving factor) in creating selection systems.
Extensive
research has been done on the predictive validity—the overall ability to
predict job performance—of different hiring methods and measures. The table
below[3]
reports the relative validity of some of the most commonly used selection practices
based on a meta-analysis of a century’s worth of workplace productivity data.
|
Graphology
(Handwriting Analysis)
|
.02
|
|
Personality
Tests
|
.22
|
|
Emotional
Intelligence
|
.24
|
|
Reference
Checks
|
.26
|
|
Integrity Tests
|
.46
|
|
Cognitive
Ability Tests
|
.65
|
|
Multi-Measure
Tests (i.e.,
Cognitive Ability + Personality + Interests)
|
.75+
|
This means
that if your hiring process relies primarily on interviews, reference checks,
and even personality tests, you are electing to use a process that is
significantly less effective than it could be. There is only one question that
matters when deciding to incorporate a selection method: is the information
gleaned from this tool predictive of future job performance? If the answer is
no, there is no point in using it, regardless of how cheap, easy, or popular it
is.
3) Scrutiny.
HR needs to get savvier when selecting
tools.
Most HR people don’t choose their profession because
they love numbers, so it’s understandable that sifting through a highly
technical validation document may be daunting; however, it’s also necessary. A
tool must meet certain criteria as it relates to reliability, validity, adverse
impact, and a number of other factors. Test publishers should be able to
provide ample data showing how rigorous they were in developing their
instrument. If necessary, HR can seek help in critically scrutinizing this
information (consultants and academics are two potential resources).
4) Metrics.
Selection-system outcomes should
be tied to organizational metrics.
HR should be
able to demonstrate that the use of a particular tool has had a direct impact
on some organizational outcome of interest. In other words, as test scores go
up, turnover goes down, or as test scores go up, sales volume increases. Many
times this can be achieved through either a concurrent or predictive validation
study.
As an example,
one of my clients has 100 sales people, who are publicly ranked on a scale of 1
to 100 based on objective performance metrics. The company leadership decided
that, more than anything, their goal was to avoid
hiring the bad ones. We were able to create a benchmark (incorporating
mental ability, behavioral characteristics, and occupational interests) that
was a clear differentiator between top and bottom performers. Using this tool,
they would have correctly identified five out of eight of their top performers,
but perhaps more importantly, they would
have conclusively avoided hiring nine
out of ten of their bottom performers. This is an example of a concurrent
validation study that demonstrates how assessment results are directly tied to
sales success.
Organizations that choose to rely on
less predictive selection methods are unnecessarily creating a competitive
disadvantage for themselves. HR practitioners have an opportunity to increase
their indispensability to the organization by creating scientific,
evidence-based selection systems that are demonstrably linked to bottom-line
outcomes of interest to the C-suite. An HR leader who can effectively do that
will be happy to be placed under the
microscope!
As you
ponder “What’s Next in Human Resources?” here are some questions for
reflection:
·
Are you feeling pressure to incorporate more
data-supported or evidence-based methods in your job? If not, could it be
coming? Have you been hearing more about “metrics,” “analytics,” or “big data”?
Is now your chance to get ahead of the curve?
·
Is there anything you can do to increase the
predictive validity of your hiring process? Are the steps in your current
process yielding measurable results? Are there tools out there that could help
your process be both more effective and more efficient?
·
Can you calculate the impact that your hiring processes
have on the organization’s bottom line? If pressed, could you tell your C-Suite
exactly how accurate your selection system is, and quantify the ROI of your
efforts? Is there an opportunity to further solidify your strategic value to
the organization by improving in this area?
[1] Sara L. Rynes, Amy E. Colbert,
and Kenneth G. Brown, “HR
Professionals’ Beliefs about Effective Human Resource Practices: Correspondence
between Research and Practice,” Human Resource
Management 41, no. 2 (2002): 149–74.
[2] M.
Lombardi, “Measurement Strategies for Assessment Success,” Aberdeen Group
(2014). http://v1.aberdeen.com/launch/report/research_report/9043-RR-measuring-assessment-success.asp.
[3] Based
on data shared by Frank L. Schmidt in a Nov. 6, 2013, address to the Personnel Testing
Council of Metropolitan Washington as an update to ——— and John E. Hunter, “The Validity and Utility of Selection
Methods in Personnel Psychology: Practical and Theoretical Implications of 85
Years of Research Findings,” Psychological
Bulletin 124, no. 2 (1998): 262–74.
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