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Think About It: Jan-Feb 2013

Is it bad to use employee referrals

Does your employer have an employee referral program? That probably is a good idea as far as finding someone who is a good culture fit. In my book Don't Hire The Best, I found that while most firms tend to hire for competencies, it is ultimately a fit with the culture that determines how engaged the employee will be.

Ergo firms that wish to strengthen their culture tend to use referral program's. research shows that such hires tend to be happier, stay longer and integrate better. Firms such as Ernst & Young are moving to increase this approach of hiring to constitute almost half of their lateral hires.

The down side is that this method also tends to exclude people who do not have strong networks. They will never know about most openings. And will never be called for an interview in the first place.

If you are out of a job, then this really cuts the probability of getting called for an interview. For the firm, it may prevent them from hiring people who are radical thinkers. Friends hiring friends may lead to an incestuous culture that discourages others from rocking the boat. You don't want to let down the friend who brought you in.

What do you think?

Have you read something interesting, of late?

Write to me and let me know at abqm7e@r.postjobfree.com Follow me on Twitter @abhijitbhaduri Read my blog on Times of India (copy and paste the link) http://bit.ly/TP9Td2

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August 15, 2012 4:34 pm

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Author:Abhijit Bhaduri

Don't Hire the Best

On 15th August 1947, India got its freedom. In one stroke all adults were given the right to make hiring decisions. After all India runs the largest mass hiring process in the world – our elections. Sixty five years later it is worth asking ourselves how good are we at hiring – at least, our politicians and ministers who represent us.

How do we make most hiring decisions? It starts and I daresay, also ends with the resume. A resume lists the tangible elements of educational qualifications and the details of the experiences gathered with employers. The assumption is that someone who is qualified to do the job and has done the job in the past is the right person to do the job for us too.

This assumption has two basic flaws: Two people with identical qualifications will produce identical results. The second is that when we are hiring someone from another firm, especially one who has had a track record of success, the ‘star’ will succeed in producing top-notch results in every organization. Both these assumptions can be questioned.

Research conducted on stock analysts with investment banks showed that most of stars fail in their new organizations despite their successful track record with the previous employer. The procedure, personalities, relationships and subcultures usually prove to be far more complex to master for these stars and this leads to abject failure in most cases.

The stars don’t stay very long in the new firm either, the study shows. “Around 36% of the stock analysts left the investment banks that hired them within 36 months and another 29% quit in the next 24 months.” That is because a person’s performance is also affected by the support system that a person has in the organization. That takes time to replicate in a new environment. The fit with the role and the culture together determine performance.Performance depends on skill and will. If a person does not enjoy what he / she is qualified to do, it will produce mediocre performance. Enough and more research shows that a person, who puts in dogged hours of deliberate practice, will outperform a qualified person who is not motivated. Motivation is a factor of personality.

Many job titles have not changed, while the requirements of the role have changed over the years. The role of a manager is a perfect example of this. Coaching and mentoring a team of young professionals is increasingly an important part of a manager’s role. Mentorship programs do not take off in many organizations after being launched with great fanfare. Not everyone who has experience that others could benefit from is motivated to mentor others. This is where personality factors override qualification.

Success in a role depends on the extent to which the personality matches the requirements of the role.

The second factor that affects performance is the culture of the organization. People are driven by different motivations. Money, recognition, power, the opportunity to help others are all motives that appeal to people in varying degrees. The people policies of any organization give us a sneak preview of the culture that prevails. The rewards and approach towards recognizing employee efforts and achievements creates the culture in which an employee performs. If they meet the deeper needs of a person’s values and motives, an employee will feel engaged and happy. A fit of the individual and the culture accounts for employee engagement.

The right hire means a person who is successful in delivering what the role demands and is happy doing it in the organization’s culture. A resume is a poor starting point because success and happiness both lie in a match of the personality with the role and the organization culture. The resume provides information that has limited impact on success and happiness.

In his book, the author George Anders talks about finding the “jagged resume” to discover those gems whose resume is unlikely to get them employed in a conventional hiring process. The person who displayed determination to pursue a goal despite many setbacks with a less than sterling resume may be a better bet in a role that needs someone with a high degree of resilience.

It requires courage to go against the established approach of hiring the people with qualifications from top institutions and who have worked with the most coveted employers.

We hire people for competence and fire them for problems of personality. Think of the last time you were disappointed with a person who came in with great fanfare but did not deliver. May be it is time to take the risk of trying out this approach of assessing personality for hiring – not just matching resumes. Think about it.

This article was originally published in Economic Times dated 14 August 2012. To read >

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