The SESCO Report – November 2010
Hiring The Right Employee The First Time
The key to establishing a highly-productive workforce is to attract and retain quality employees — those who are worthy of an opportunity within your organization. If we hire the right person, the first time, employment issues such as poor productivity, attendance, lack of teamwork, poor quality, low morale, turnover, etc., can be avoided. Organizations need to ensure that their "bus" is full of good employees.
In addition to traditional screening and hiring techniques such as reviewing resumes, contacting professional references, conducting background checks and establishing and implementing behavioral interviewing questions, additional resources such as pre-employment assessment tools are extremely valid and strongly recommended. Please consider the following reasons to utilize pre-employment assessments:
• Two of three new hires will disappoint in the first year
• Thirty-three percent of applications are falsified
• Two of three employees would rather work somewhere else
• Ninety-five of 100 applicants will "exaggerate" to get a job
• Most hiring decisions are made in haste — during the first five minutes of an interview
• One of three businesses will be sued this year over an employment issue
• Turnover costs thousands of dollars for every departing employee
• Eighty percent of employee turnover is avoidable
You want employees who are dependable. In 1998, absenteeism cost employers $757 per employee, according to a report in USA TODAY. This was the direct cost reported by a survey of human resource professionals and does not include the cost of hiring others or paying overtime to perform the work of absent employees.
You can be held liable for employees' behavior on and off the job. You must know the nature of the people you hire because their criminal behavior could cost your business millions of dollars. Every time you hire without practicing due diligence, you may be accepting liability for their actions — even when they are "off the clock."
You can be sued for illegal discrimination. In the absence of objective data, how can you demonstrate a hiring/promotion decision was made objectively, without discrimination because of gender, race, religion, etc.?
Resume writers write great fiction. In a survey of recent college graduates, 95% said they would be willing to make a false statement in their resumes in order to get a job. Forty-one percent admitted they had already done so, according to a report in Nation's Business (May, 1999).
Testing is acceptable, even expected. As reported in Molding Systems (May, 1999, v57 i5 p56(1)), a survey found that 92% of job applicants accept testing as part of the job qualification process. Only 3% resent it, while 5% were neutral.
Assessments offer a solution. Historically, employers depend upon resumes, references and interviews as sources of information for making hiring decisions. In practice, these sources have proved inadequate for consistently selecting good employees.
When training employees, a "one size fits all" approach has failed to provide the desired results.
When selecting people for promotion, otherwise excellent employees have too often been miscast into roles they could not perform satisfactorily.
Clearly, an essential ingredient for making "people decisions" has been missing from the formula.
The use of assessments has become essential to employers who:
• want to put the right people into jobs;
• provide employees with effective training;
• help their managers to become more effective; and
• promote people into positions where they will succeed.
The use of assessments has resulted in extraordinary increases in productivity while reducing employee relations problems, employee turnover, stress, tension, conflict and overall human resources expenses.
Several factors contribute to the failure of traditional hiring methods. Resumes often contain false claims of education and experience while omitting information that would help employers make better hiring decisions.
Business references are of little value because most past-employers will tell you nothing but "name, rank and serial number."
These realities are the reason interviews have become the most influential factor in hiring and promotion decisions. However, experience shows only a coincidental correlation between the ability to deliver well in an interview and to deliver well on the job. Studies peg this correlation at 14% — one good employee in every seven hires. Even background checks don't help much. The success rate becomes 26%, but that's only one good hire in every four. Unfortunately, many employers have accepted these poor results and the high cost of excessive turnover as a business reality. They have flown the white flag of surrender.
Don't Surrender! Assessments do help significantly. Assessing behavioral traits improved the hiring success rate to 38%.
When both thinking abilities and behavioral traits are assessed, the right people are hired 54% of the time.
When an assessment of occupational interests is added, successful results improve to 66%.
The most impressive results are achieved, however, when an integrated assessment is used – one that measures behavioral traits, thinking, occupational interests, plus "Job Match."
These integrated assessments employ cutting-edge technology and empirical data to assess the qualities of "The Total Person." In doing so, the individual qualities of candidates are compared to the qualities of employees who performing their duties in a superior manner. These 21st Century assessments successfully identify potentially excellent employees better than 75% of the time.
Job Match outranks all other factors. A well-documented study, published in Harvard Business Review concludes that "Job Match" is by far the most reliable predictor of effectiveness on the job. The study considered many factors including the age, sex, race, education and experience of approximately 300,000 subjects. It evaluated their job performance and found no significant statistical differences, except in the area of "Job Match." The conclusion: "It's not experience that counts or college degrees or other accepted factors; success hinges on a fit with the job."
The only reliable method for evaluating "Job Match" is with a properly-designed assessment instrument, capable of measuring the essential job-related characteristics particular to each specific job.
Contact SESCO to discuss assessment tools or visit www.sescomgt.com and click on "Employee Testing & Background."
Avoiding Workplace Problems
Management can prevent employee behavior and performance issues through effective planning and communicating. The following five (5) basic steps can and will prevent most employee behavior and performance issues:
1. Define expectations.
2. Reduce expectations to writing – job descriptions/employee handbook.
3. Clearly articulate expectations and provide coaching/mentoring where necessary.
4. Properly reward good behavior through psychic compensation (praise) as well as monetary when the system allows.
5. Holds employees accountable through progressive counseling, coaching and termination if behavior doesn't improve.
Additionally, there are times that the workplace environment is to blame for employee issues. The following are common contributing factors that should be assessed and addressed where possible:
1. The employee has too much to do.
2. The employee is not well matched for the job.
3. The employee dislikes the boss.
4. The employee constantly brings problems from home into the workplace.
5. The employee receives poor supervision.
6. The employee is unclear about the big picture.
7. The employee has a personality disorder.
8. The employee's expectations don't align with the company's or boss's expectations.
9. The employee is basically immature.
10. The employee finds that the job reality doesn't fulfill his/her fantasy.
Managers Must Be Truthful In Conducting Performance Reviews
Most managers will agree that they dread and do not like conducting performance reviews. Common reasons based upon managerial feedback that we've received over our many years of consulting include:
1. Adequate training is not provided.
2. There is not cause and effect; i.e., compensation is not tied to performance management.
3. They are not provided a tool or the tool is not effective.
4. The manager does not have the authority to effectively manage the behavior.
5. The culture allows "mediocre behavior" to hang around.
In conducting performance reviews, we find that the above reasons are most common and additionally, due to some of these reasons, managers and supervisors will simply "socially place" employees through the process. For example, give an employee high ranking as it is easy to do so as well as avoid perceived "conflict."
Supervisors and managers are occasionally fearful of reducing to writing poor performance and having to explain to employees the issue. As such, managers will many times avoid the conflict and as such, the performance review is too positive.
This behavior many times is the result of employees and managers building close friendships, the performance rating will result in a higher pay increase or, again, the manager simply hasn't been trained or has the tools necessary to conduct a thorough and helpful performance review.
Performance reviews, when conducted correctly, should never be a surprise to the employee. As performance concerns arise, the manager should address concerns at the earliest and most appropriate time. This active management will link issues and concerns about performance with actual tasks or behavior that are of concern. Avoiding or waiting until review time confuses employees; it is simply not fair to the employee and will cause more problems than addressing the issue head on.
In addition to managing the employer's largest, single controllable cost — compensation; ensuring that there is an effective return on compensation, it is also extremely critical that performance reviews are accurate to avoid legal issues such as EEO and discrimination. When we audit client personnel files, we review performance appraisals to determine if the performance appraisals create liability, re: was there positive performance appraisals but yet a recent termination or pay increase? Does the performance appraisal properly and accurately reflect the realities of the employment relationship? If they do not, significant liability is created as if there is alleged wrongdoing, re: unemployment claim, discrimination charge or wrongful termination, performance appraisals and related documentation must support the realities of the employment relationship. If they do not, the employee and his or her attorney will have the necessary documentation providing inconsistencies to support the alleged wrong doing.
It behooves employers and human resource professionals to:
• Provide the necessary tools for managers to be successful, re: policies and procedures (employee handbook), accurate and up-to-date job descriptions, an effective performance appraisal system and compensation administration program tying performance appraisals into compensation.
• Provide training for leaders and managers on effective management techniques, performance management, performance appraisals and legal issues/awareness.
Special Thanks to SESCO Clients!
First Peoples Bank of Tennessee
Jefferson City, TN
Christian Church Homes of Northern California
Kendal at Lexington
"Praise God even when you don't understand what He is doing."
~ Henry Jacobsen
"Let us remember that, as much has been given us, much will be expected from us, and that true homage comes from the heart as well as from the lips, and shows itself in deeds."
~ Theodore Roosevelt
"It is the duty of all Nations to acknowledge the providence of Almighty God, to obey his will, to be grateful for his benefits, and humbly to implore his protection and favor."
~ George Washington
SESCO Client Inquiry – Staff Response
Question: What are the legal issues related to background checks?
Answer: Conducting background checks is an important part of the selection process. Negligent hiring has become a common legal claim against employers who have made hiring decisions without making a diligent effort to check a person's work and personal history. It is particularly important to conduct a background check on individuals who are dealing with the public or who are in positions of trust, such as jobs which involve entering customers' homes. State regulations often require background checks for employees working with children, the elderly, and those providing patient care in health care facilities. One of the most important parts of doing a background check is to obtain a release from the applicant. This is especially important when a credit check will be performed. The Fair Credit Reporting Act imposes specific notification guidelines on employers.