Framework for the Course

MGMT 4020

Hiring and Retaining Human Resources

Major Themes of Books• Talent Flow

– Performance yield-> Performance problems are inevitable

– Flow and change is also inevitable– Job Satisfaction is a key driver of talent flow

• High-Impact Hiring– The state of practice in hiring lags behind the state

of the art– Effective hiring is systematic, comprehensive and

performance-focused; an investment, not a cost– Avoiding problem employees is as critical as hiring

effective employees (and yet different)

• “Evidence-Based Management”

Perf Yield – Typical Interviewr = .14

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Perf Yield – “Good” Systemr = .36

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Why is Performance Yield so Low?

• Difficulty of job

• Limitations of hiring system– How selective you are

– Accuracy (validity) of hiring tools

• Bad decisions by applicant

• Changes in employee after hiring

Factors Affecting Hiring Success

Difficulty of Job

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Hiriring Score

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Hiriring Score

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Successful Employees

Unsuccessful Employees

Base rate of success = 9/18, or 50%

Base rate of success = 14/18, or 78%

Easier Job

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Unsuccessful Employees

Successful Employees

Factors Affecting Hiring Success

Selection Ratio

(How selective you can be)

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True Positives

False PositivesTrue Negatives

False Negatives

Success rate = 8/12, or 67%

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Hiriring Score

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True Positives

False PositivesTrue Negatives

False Negatives

Success rate = 8/12, or 67%

Success rate = 5/6, or 80%

Factors Affecting Hiring Success

Validity of Hiring System

(r = .83 vs .63)

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Hiriring Score

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Success rate = 73% (vs 67%)

(and no False Negatives)

r = .83 (vs. 67)

False Negatives True Positives

True Negatives False Positives

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Hiriring Score

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Success rate = 73% (vs 67%)

Success rate = 100% (vs 80%)

False Negatives True Positives

True Negatives False Positives

So What Can You Do?• Increasing Yield

– Simplify job – Recruit more/better candidates– Use more valid hiring procedures– Help applicants make better decisions (RJPs)

• Coping with “Failures”– Training– Placement may be as important as selection– Over-hiring (continuous hiring)– Remove hiring mistakes– ?

Performance Yield over Time

Post-Hire Changes in Performance

• Relative rates of change in performance– From positive to negative – From negative to positive

• Relative rates of exit of high and low performers

More common!

Turnover generally higher among better performers!

WHY?

Study of Hiring Managers

What’s the “secret” to successful hiring?

Summary: Why Hiring Failed

• Inadequate Process: 50%

• Inadequate Applicants: 14%

• Pressure to Hire Wrong Person: 13%• Limitations of Interviewer: 12%• Fooled by Applicant: 11%• Didn’t Explain Job: 3%

Why Hiring Failed

Inadequate Process (50%)

• Interviews: 15%

• Reference-checking: 13%

• Not enough time: 7%

• Wrong qualifications: 7%

• Not selective enough: 4%

Evidence-Based Practice

• Evidence-based medicine is a methodology for evaluating the validity of research in clinical medicine and applying the results to the care of individual patients. Evidence is gathered through systematic review of the literature, and is critically appraised.  The results are then integrated with physician/patient decision making.

http://www.ebmny.org/thecentr2.html#WHY

Evidence-Based Practice & Project

• Develop a focused clinical question concerning the patient's problem(s)

• Search secondary databases and the primary literature for relevant articles

• Assess the validity and usefulness of those articles

• Judge the relevance to the individual patient

• Implement the findings in patient care

Why Performance Problems?• Hiring Issues

– Limitations of hiring system• Difficulty of job not much you can do• How selective you are Recruitment• Accuracy (validity) much can be done• Bad decisions by applicant RJPs?

• Obsolescence of skills Hire for ability; training

• Changes in employee behavior– reduce job dissatisfaction; encourage

constructive problem-solving

Three Models of Hiring• Warm-Body Hiring

• Ritual Hiring

• High-Impact Hiring

High Impact Hiring Principles• Systematic

• Comprehensive

• Performance-oriented– does it deliver better job performance?

Steps to High Impact Hiring Understanding job performance Anticipating hiring needs Recruiting high potential applicants Comprehensive evaluation of applicants Performance-based decision-making