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Performance-based Hiring: The New Operating System

By Lou Adler, October 28, 2005

In a recent article - Does Your Company Really Have What It Takes to Hire Top Talent? - I presented a 10-point assessment on how to measure your company's ability to hire top talent. Take the evaluation to see where your company stands. In this article, I'll make the case that by implementing an operating system for hiring top talent, companies will finally be able to win the war for talent by making sure everyone involved in hiring is on the same page - using the best tools and techniques available. Even better, I'll suggest that a proven operating system (OS) already exists - Performance-based Hiring.

Read more articles by this author.

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By establishing a set of standards used by every participant - vendors, recruiters, hiring managers, IT, candidates, all members of the interviewing team - hiring top talent can become a systematic business process. The purpose of this OS for hiring top talent is to maximize candidate quality while reducing time to hire to 2-3 weeks and cut cost to hire by more than 50%. These are achievable goals.

Consider this. If a company is not an employer-of-choice, or when candidate supply is less than demand, it takes enormous resources to consistently hire top people. This situation is more difficult when technology doesn't integrate well with new and existing tools, when every manager does it his or her own way, when recruiter competency varies from strong to weak, and when best practices are ignored due to lack of time or leadership.

An operating system is the key to winning the war for talent, and there is no need to wait for some new solution just around the corner. The marketing knowledge to quickly find and source top people is available today. The technology to process information efficiently and improve recruiter productivity is available today. The recruiting skills to recruit and close top people are available today. The assessment tools to accurately assess candidate competency are available today. What's lacking is a unifying OS tying all of these processes together. Performance-based Hiring can become this unifying OS.

Thousands of managers, recruiters and top candidates have already used Performance-based Hiring successfully. Companies as diverse as Yahoo!, AIG, Texas Instruments, Wells Fargo, Red Bull, the YMCA, Verizon, HealthEast Care Systems, and Broadcom are now successfully using Performance-based Hiring. Position type doesn't matter. These companies are now using Performance-based Hiring to hire camp counselors, entry-level call center operators, nurses, engineers, software developers, investment advisors, managers and executives. Furthermore, these same companies are now starting to push their vendors to support these standards. This is the tipping point in converting a great hiring process into an OS.

Performance-based Hiring addresses three core recruiting and hiring processes: 1) describing how job descriptions must be written; 2) setting standards for how top people should be sourced and recruited; and 3) using approved and practical techniques to interview and evaluate top people. The needs of top people are different on every one of these measure. Up until now, these needs have been largely ignored. This is why companies still work too hard finding and hiring enough top talent. Here's the quick take:

Part I. Use performance profiles rather than job descriptions to accurately define the real job. Every job has 6-8 tasks or objectives that define superior performance. Performance profiles capture these in priority order. Traditional job descriptions are too subjective on this measure, and besides aren't very compelling. More important: the best people might not have exactly the described skills and be inadvertently excluded. Worse, even the best people with the skills won't consider jobs that seem boring or are written in demeaning terms.

To create performance profiles, hiring managers need to define the work a person in the job must do to be considered a top performer, not what the person must have in terms of skills and experience.
By describing the challenges and opportunities in the job, the best people are more likely to evaluate the opportunity presented. For example, "must have five years of C++ and Java" is less appealing than "use your C++ and Java background to lead the development of our interactive online store." So if you want to consistently hire top people, you must eliminate traditional job descriptions as a sourcing and selection tool.

Part II. Source in the sweet spot. Top people don't look for work, decide to apply, remain in the interviewing process, or accept offers the same way less talented people do. If you want to consistently attract and hire the best people, every aspect of the sourcing and hiring process must be redesigned to meet their needs. Top people, whether they're active or passive, are more discriminating: they must be treated with respect; they won't waste their time hunting for jobs; they won't apply for jobs if they're not instantly compelling and easy to apply for; they will only consider jobs that offer immediate job stretch and long term job growth; and they will always discuss any career move with their circle of advisors.

Every phase of the sourcing process must map to the career finding and selection process which top active and passive candidates use. Marketing and advertising to this group must consider how ads are found, how well they're written, how calls are made, how referrals are gotten, and must make sure that every contact with the company is positive. This must be complemented by first rate back end processing and administration. Search engine technology can easily separate the good from the bad. This is critical, since the best people must be called within days. Passive candidates need a lot more hand holding - requiring more talented recruiters and totally committed hiring managers. How to cover these points is part of the operating standards. If you don't have these types of standards in place now, you're currently losing great people for all the wrong reasons.

Part III. The use of performance-based interviewing. Traditional interviewing is flawed. If you want to attract top people, an interview must integrate recruiting, negotiating and closing directly into the questioning and assessment process. Not only must it be accurate: it must be easy to learn, insure 100% user adoption, eliminate emotional bias as part of the process, and prevent candidates from gaming the system. On top of this, it must engage and respect the top person being interviewed.

The performance-based interview I'm proposing as part of the hiring top talent OS meets or exceeds all of the requirements noted above. I've written about performance-based interviewing for years. Dan Hilbert, the Director of Recruiting at Valero Energy, said it best - Adler's performance-based interview is not only the easiest to learn and the most accurate, it can be used effectively the next day. The use of the structured performance-based interview we recommend in combination with our 10-Factor Candidate Assessment template converts the hiring decision from a gut feel into a deliberative and accurate assessment process. SHRM has written a white paper describing this interview as an effective and approved behavioral interview. Charles Handler, PhD, has written a white paper validating the use of this performance-based interview. Fisher & Philips, the third largest labor law firm in the country, has written a white paper describing this interview as more legally sound and more accurate than any other form of interviewing. Not only is the performance-based interview valid and legally sound, managers can learn it in half a day.

So what's stopping you?

An effective operating system for hiring top talent can't be made up of a series of standalone tools and technologies. This is what we have today. The lack of integrated standards is the fundamental reason why a company's ability to consistently hire top talent hasn't gotten much better despite years of trying. Hiring top people today is still more art than science. Great hiring results still depend largely on the skill of the recruiter and hiring manager, or a forceful recruiting leader. While we'll never replace the great recruiter, committed hiring manager or forceful recruiting leader, the science is available today to make hiring top talent a systematic business process. It starts by implementing a set of operating standards like Performance-based Hiring. Email me (lou@adlerconcepts.com) if you'd like to participate in the creation of this new hiring standard.

This article originally was published in the Electronic Recruiters Exchange (www.erexchange.com). Check out the ER Exchange for more great recruiting information.