By William Shepherd, Ph.D
Selecting the right candidate for the right position is one of the most important challenges faced by organizations today. Hiring the wrong individual typically costs an organization 150 percent of the employee’s annual salary – and the cost of a bad hire is even greater for management level positions. To minimize the subjectivity leading to poor hiring decisions, employers should use validated selection tools to reduce turnover, increase productivity, improve customer service, and increase revenue. Better hiring translates into real dollars
To avoid subjective, bad employment decisions, organizations must ensure their decisions are based on criteria related to employees’ competencies to perform essential job functions, and not on unlawful criteria such as race, sex, age or disability. The more subjective the criteria, the more difficult it will be for an employer to establish that its employment decisions were made on job-relevant criteria. The advantage of using objective tools such as the PsyMax Solutions Work Style Assessment inventory is that it gathers objective, job-relevant data that allows organizations to rank-order candidates based on their likelihood of success if hired. The procedures discussed here will help establish and document the job-relatedness of your process.
Developing a Success Profile
We recommend developing Success Profiles for each targeted job. Your approach to determining core competencies should be consistent with best practice approaches to job analysis and competency modeling such as:
- Facilitate a focus group workshop with Subject Matter Experts (SMEs) to determine which work styles are most important for a given job.
- Conduct a questionnaire-based job analysis. Multiple SMEs will complete a survey regarding which work behaviors are most critical for performing the job.
Seeing Beneath the Resume
Resumes provide information about skills, knowledge, and experiences. These are useful predictors of how well people will perform in their current jobs. However, as job requirements change, the skills, knowledge, and experiences that were important for successful job performance may also change. Therefore, measuring psychological factors during the hiring process can have the highest Return On Investment because these factors enable employees to develop the knowledge, experience, and skill needed to succeed in any job. Similarly, background and credit checks are also critical foundational factors that help assess honesty and integrity – traits that are important for all jobs.
Case Study
Borders Group has over 32,000 employees and operates over 12,000 Borders and Waldenbooks stores around the world. Since 2002, Borders has used the work-style assessment inventory as a predictive tool to assist in the selection of its store and district managers. As a first step, Borders worked with psychologists at PsyMax Solutions to develop a success profile of the most critical work styles for performing these jobs. They continue to use the WSA inventory work style and degree-of-fit scores as part of the hiring process.
A recent independent study published by Cornell University documented that the WSA inventory has had a significant effect on store profits at Borders. The District Managers’ WSA inventory scores over the last two years were analyzed. There was a significant relationship between District Managers’ work styles, as measured by the WSA inventory, and annual district profitability. District Managers who scored better on the WSA had increased annual profits of $11 million.
Dan Smith, Borders’ senior vice president of human resources, said, “Borders’ success is determined by the management team at each location, and PsyMax helps us to identify the candidates with the characteristics that we know drive sales most.” Borders concluded that using the assessment tools to help select managers is well worth the cost, and it will continue utilizing them. Borders also plans to conduct training programs for store managers and district managers to help them develop the specific work styles that drive profitability.
AUTHOR BIO
William Shepherd, Ph.D., is an industrial/organizational psychologist and president and chief operating officer of PsyMax Solutions, a Cleveland-based HR assessment and development company. Dr. Shepherd’s previous posts include work in the Employee Capability & Competency Design group at GTE, and in the Global Selection Solutions Practice area of Personnel Decisions International. Most recently, Dr. Shepherd was the Director of Solution Design for ePredix, providing human capital measurement tools that drive organizational profitability.
Shepherd’s applied work has included developing competency models, assessments, interview systems, and development tools for organizations to use in sourcing, hiring, developing, and promoting workers. He has led strategic staffing audits of organizations to evaluate and benchmark their staffing and retention methods against best practices. His work also has included the development, administration, interpretation, and action planning of organizational culture surveys.
Dr. Shepherd has presented his research at academic conferences of the American Psychological Association, the Society for Industrial/Organizational Psychology, and the Human Capital Metrics Consortium. In addition, he has been published in Personnel Psychology and the International Human Resources Information Management Journal. He is also a contributing author to the Successful Manager’s Handbook. His recent presentations have focused on the emerging trends and implications of Internet-based assessment. He may be contacted via e-mail at wshepherd@psymaxsolutions.com.
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