Another colleague told us that the most important thing to do is focus on what you do well and capitalize on it.  Identify your core sales channel and devote all your effort to building your business there.  Identify potential customers who are within that channel and shake the proverbial tree until you achieve success.  While this strategy is a bit more scary, it certainly makes sense, since what you do well is generally something that you know very well, probably can be done pretty cost effectively, since you do it so often, and something that you can do without adding additional resources in most cases.

The third strategy I think is important is to get rid of the customers who require a lot of support and care, but who provide you with little revenue.  If they aren’t profitable, then you are better off without them.  Focus the resources you just freed up to work on expanding your business with the customers or potential customers you know are profitable and who see you as a partner, not a vendor.   If it costs you money every year to negotiate contracts with the client, and you are continually reducing pricing and providing more service for less revenue, you might want to take a close look at that customer to see if they really provide you with a return on investment.

The last strategy I think is important is to continually expand the relationships you have within your customer base to be sure that you have multiple points of contact within the organization in case the customer’s business changes quickly.  If you only know one or two people and these people are at a fairly low level or at the extreme, at the top of the organization, when times are difficult, you know who goes first.  Make it a practice to know people at all levels of the organization so that when change comes, the new broom doesn’t sweep you out the door.

While none of these ideas are particularly innovative, except perhaps the one from our friend in Japan, adversity is the mother of invention.  I am taking time to think of ways to apply these ideas to make some lemonade.

I always try to be honest with these requests, but to watch what I say with care.  I am open in sharing the strengths of the individual and in offering examples of positive business contributions the individual made to the organization.  When asked about the individual’s weak areas, I also try to be open, but I rarely offer examples, even when pressed.

The other thing we do here at ECI is to prepare an exit letter that states what we will say about the individual when other employers call for references.  In this way, we have some documentation to use in the process and are more likely to stick with the facts of the matter when someone calls to check references.

More often than not, my own experience is that people want to do well at their work.  The reason they fail is more of a mismatch issue, either with the work group to which the person is assigned, to his or her manager or to the company.  Often employees expect and need certain things to do their jobs effectively and the company cannot consistently supply the things the person needs.

For example, some individuals believe that they will soon become managers, since we are a smaller employer.  So, they work hard and hope they will soon be promoted.  We tend to be very clear about the fact that we are a very flat organization and your promotion will probably be more like “you get to work on more complex accounts and larger projects,” but people don’t usually hear that part.  Sometimes a person takes on a role in the organization, and they get stuck in that box for the whole time they are in their career with you.  A lot of this has to do with a perception of the individual and people’s prior experiences which tend to color the actual assessment of the person’s real skills and capabilities…or in the alternative, the individual may have a blind spot he/she is unable to accept.

For others, they want to work independently and to provide to the client what they believe is best for them, regardless of the company’s philosophy or business approach.  The problem with that one is that there is generally a history with a client and as a consulting firm, you’re probably best off in approaching the client in they way they are accustomed, rather than frequently trying new strategies or systems.  Their knowledge of how you work is probably why they hired your company in the first place.

I was lucky this time.  I was able to talk about the prior employee in a favorable way, because the employee does have many fine qualities and made a positive contribution to our company.   If I had been the placement counselor, I think I might have asked a couple more pointed questions to see what I could find out.  Silence is as strong a predictor as an in-depth answer at times.

The next time I hire, however, I am going to look into Skill Survey.  This is an online application where potential employers ask the candidate to provide work references and contact information for prior employers of the candidate.  Each prior employer is asked to complete an online confidential questionnaire and to rate the candidate on key work areas.  The responses are all rolled up for the employee and you get to see what others have to say about the individual’s prior work experience in a nicely presented report.  Apparently, the response rate is very high on this application and the information yielded is far superior to what you can get doing a phone check.

And the big advantage is I don’t have to answer those phone calls anymore.

The first question is “Which program are you talking about?”   EEO and affirmative action?  Uniform Guidelines for Selection or the OFCCP?   And who needs to comply?  Are their organizational size limitations, government contracts needed to require compliance, or other things that are of importance?  Here are some citations for your reference that may help to answer, or confuse, you  on the matter.

1. OFCCP: “The Executive Order prohibits federal contractors and federally-assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year, from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. The Executive Order also requires Government contractors to take affirmative action to insure that equal opportunity is provided in all aspects of their employment.”
2. EEO Guidelines: Each Government contractor with 50 or more employees and $50,000 or more in government contracts is required to develop a written affirmative action program (AAP) for each of its establishments. This section also requires annual tracking and reporting of data about candidates being selected, promoted or released.
3. Uniform Guidelines for Employee Selection Procedures: The Guidelines cover all employers with 15 or more employees. They also apply to government contractors and subcontractors.  The Guidelines establish procedures for instituting all tests, selection processes and inventories used to make hiring decisions.

So the short answer is, if you have 15 or more employees, then you had better take a look at your selection process to ensure that it does not discriminate against protected classes and that you gather sufficient information in interviews, tests or inventories, reference checks, background screens or other procedures to avoid falling awry of the 4/5ths Rule.

The 4/5ths Rule is part of the EEO Guidelines and says that no selection procedure may screen out individuals within protected classes at a rate of 80% of the rate at which it screens out the unprotected classes.

1. Does your company have more than 15 employees?  If so, then you must comply with the Uniform Guidelines and be sure to remember the 4/5ths Rule.  No government contracts mean you don’t need to worry about instituting the affirmative action plan just yet.  If you have $10K in government contracts, however, then you need to write the affirmative action plan and institute it.
2. Does your company have over 50 employees and $50K in government contracts?  If so, then you must comply with the Uniform Guidelines as above and also take action to institute an affirmative action program, including the written affirmative action policy and annual reporting.
3. Does your company have contracts with the government that yield $10K or more per year?  If so, then you must prepare and institute a written affirmative action policy.
4. Does your company use the internet to advertise your openings and gather resumes?  If so, then the newest OFCCP guidelines say you need to be soliciting information on race, gender, age, and ethnicity.  Your applicants get to decide whether they will provide the information, but you need to ask for it.  Also, it is a very good idea to respond electronically to every individual who submits interest in your position and ask them to verify that they are in fact interested.  A good practice is to ask them to return additional information to you.  Lack of a response documents that they are not an active candidate for your consideration.

At the end of the day, rather than try to distinguish your accountability in devising selection criteria on your own, and what information you should be tracking, ask your company attorney to advise you.  And once you have your selection process in place, have your attorney review it and take his or her advice on how to improve it.  Business is tough enough these days without having to deal with a claim arising out of any of these laws, guidelines or agencies.

As one of our writers pointed out a few posts ago, the reason most people start looking for a new position is that they are feeling as if they don’t “fit” within the roles to which they are assigned.  The easy “misfits” to recognize are the people who can’t seem to understand what the assignment is, or they can’t get things done, or who dive too deeply into the complex details of their work, thereby missing the “forest for the trees” at the end of the day.  Sometimes, this is a matter of coaching and teaching to build the confidence needed to get the job done.  Other times, this is a matter of egos, and something you probably won’t be able to resolve.

The more difficult ones to recognize are the people whose work is so superior that you believe everything is stellar.  You know the person might be a bit stressed, but since they do so well with your customers and rarely need support, you keep telling yourself that things are fine.  You listen to your clients telling you what a good job this person is doing and figure that, because of this, the person is fully gratified in the role.

You find yourself particularly shocked when these individuals tell you they have found another job and will be leaving soon.  After the fact, you go back and you look at the results of the good performer’s ECI Behavioral Insight and start questioning yourself because you knew this all along.  The results tell you that this person likes a stable environment, where an orderly approach is in play.  They prefer knowing the rules and having everyone abide by these within the team.  They take pride in devising a process, then using the process in new projects, since it worked so well the last time.  They don’t like having to invent thinking for every project that comes along.  Because of the high standards they set for themselves, their chances of feeling fulfilled in such an unpredictable environment as exists at ECI for the long term term are probably somewhat limited.

In these cases, you just have to be thankful for having the person with you for a time and hope that the experience provided good learning and growth.  And of course, you always keep in touch with them to follow their progress into new places.

The answer to that one is, it depends….If you utilize a tool that is not well constructed and tends to score populations or groups differently, then the answer is probably true.  This is why you need to do some diligence before instituting the use of any tools within your talent management systems.  Avoid the use of tools that must be hand-scored or interpreted by an individual, as these may generate rater bias.  Styles inventories are fine for development and team building, but should not be used for selection purposes.  Tests that are easy to fake, such as word inventories (which statement/term is most or least like you) should also be avoided, unless the test documentation can provide high reliability and validity.

Be sure to ask the test provider for the technical report or validation study before introducing any new tool within your company and have that report reviewed by someone familiar with testing to ensure that the findings are sufficient to demonstrate reliability and validity.  Also, ask about disparate impact on protected classes to see what studies have been done and what proof the test provider can offer you that the tool does not discriminate.

The research around the importance of cultural fit could cause companies to put diversity aside in favor of only hiring people who match a particular success model, since these people should have a better chance of success.  When this occurs, it is generally a result of some key factors.

1. The test being used in fact causes disparate impact as it scores.  If it didn’t, then all people, regardless of gender, race, age, or ethnicity, who demonstrate particular preferences or tendencies will match the core factors for success.
2. Too much emphasis is being placed upon the results of the test.  This is frequently a problem where training is not consistently offered in how to use test results and how not to use test results.
3. Avoid the use of a test that produces a Recommendation – Good Match to Position, Poor Match to Position – Recommended or Not Recommended, then you increase the chances that your managers will look at this bottom line first and put aside the information they gathered in interviews or in the work experiences.
4. Hiring managers don’t really know what factors lead to success in a particular role or position.  They tend to look for and hire people who are more like them, rather than people who demonstrate the core factors for success for a particular role.

Note that we’re talking about core factors for success.  If you want to encourage diversity, stick to the core factors for success and hire people who are motivated by the work and the general milieu of your culture, rather than they possess one or two key traits that you know are common to people in your company.  We once had a client who refused to look at any candidate who didn’t have a score of 50% or higher on Pace/Urgency.  We had to do a good deal of education to show that Pace/Urgency wasn’t the only core factor for success.

Put less emphasis on secondary style factors, and avoid doing as our client above did, unless you are driving change in your culture.  If you need people with more initiative, then look for individuals who possess independence, high energy, a bit more tendency to take risks and who are quite flexible.  These tendencies are all readily measurable in a good personality assessment.  Once your new hires are on the job, however, make sure to manage them as they need to be managed, or they will soon move elsewhere!

If you follow these simple principles, then you will be able to hire a diverse population who are a cultural fit with your organization.  Using good assessment tools isn’t something you need to be afraid of.  Consider Home Depot.  The EEOC recommended that they include such measures to help hiring managers make better hiring decisions on the basis of more objective information, after a suit of discrimination was raised.

Meet Jim, an aspiring sales executive with background in the finance industry.  Jim is looking to gain exposure outside of the financial industry and to attain a role that moves him up the proverbial “ladder”.  In the finance industry, Jim excelled in various sales roles, acquiring greater levels of responsibility very quickly.  He has thrived in the structured, regulation-driven environment in which his company operated within the industry.  Looking to expand upon his professional resume, Jim is now exploring employment with organizations across various industries.  Although Jim’s experience has primarily come within the finance industry, he believes that he can easily transfer his knowledge and skills to a different environment.

What is the best fit for Jim? Organizations, of course, are very focused on finding the ideal fit for not only the role they are hiring for, based on skills and experiences, but also for a good match to the organizational environment and culture.  But how many companies focus on ensuring that their role, corporate environment, and organizational culture are truly an ideal fit for the applicant?  It is easy to assume that if we, the organization, find the ideal fit then the organization must be a perfect fit for the individual as well.  Unfortunately, this assumption may be inaccurate at times.  Applicants are eager to make a good impression during their interview and may have the propensity to sacrifice concerns or misgivings of their fit to the role or the organization in order to give the “correct” answer or tell the interviewer what it is they think they want to hear.

Going back to our friend, Jim…Jim is interviewing for a sales manager role with a successful computer system design company.  The company is a trend-setting, forward-thinking organization focused on innovation and leading the way in the industry.  Jim has had some qualms over whether or not he would be comfortable working in such an “outside the box” environment.  His previous experience was in a very structured, guidelines-driven environment which he thoroughly enjoyed and felt comfortable in.  Although he questions his fit to the computer system design company, he goes forward with the interview and is hired.  Nine months later, Jim is living in a land of ambiguity and is surrounded by creative minds who are more comfortable “bending the rules” than abiding by them.  Jim is not comfortable in his position nor in the organizational environment which is a stark contrast to his ideal work situation.  Jim is back on the search for a role and company that is truly a good fit for him.

Jim’s situation is not an uncommon one.  This “mis-fit” between applicant and environment results in reduced morale, job satisfaction, as well as increased absenteeism and turnover.  This costs the organization time and money on hiring, on-boarding, and training processes while costing the employee stress, time out of work, and emotional well-being.  But how in the world do companies figure out if the two-way street of “fit” is in alignment?  Interviews and supporting hiring tools, such as personality inventories, can be invaluable to ensuring this alignment.  Although neither is a “magic elixir”, asking very detailed, targeted interview questions that uncover the individual’s work and style preferences can uncover critical information needed to determine fit.  Moreover, personality inventories, such as the ECI Behavioral Insight, provide the interviewer with information about the candidate that extends beyond the skills and experiences commonly found on the resume.  Personality assessments allow the hiring manager to gain insight into the innate behavioral tendencies of the applicant, including information regarding natural motivators and drivers.  Where these motivations strongly differ from the work environment or characteristics of the role, the interviewer can probe to gain a better understanding of the potential misalignment between the candidate and the role/organization.

“Fit” issues are a major concern for organizations due to the tremendous costs companies incur after a bad hire.  It is important for organizations to take a holistic approach and consider concerns of “fit” from not only the perspective of the company, but also that of the applicant.  For more information about job, organization, or motivational fit or the ECI Behavioral Insight, send us an email or give us a call!

At ECI, we regularly conduct studies of organizations in our efforts to assist in the reduction of turnover.  All too often the findings of these studies reveal undefined culture and divergent viewpoints among leadership.  In order to avoid cultural lack of fit the first place to begin is of course, the most obvious, to define your company’s culture.  Culture should be a topic on meeting agendas regularly.  It does tend to evolve with marketplace shifts, other external factors, and especially changes in personnel, so it should be discussed and agreed upon biannually.  An objective 3^rd party study is a very effective, but not absolutely necessary, way to determine and define your organization’s culture.  You can quite simply gather your leadership and have a round table discussion with your vision and mission statements as starting points.  You may actually find that there is discord between your mission and vision and leaderships’ collective viewpoints of the current culture.  If this is the case, the time is ripe to embark on an initiative that re-aligns your company’s culture with the values of its employees.  Researchers report that companies with alignment between their mission and vision and culture are at least twice as successful as others.

One simple way to either preserve or adjust your company’s culture moving forward is through the administration of a personality assessment.  Valid and reliable assessments reveal the innate motivators and drivers of individuals.  You can adapt your culture by identifying what works well within your organization, then defining those traits that are common among your top performers.  You can then manage lesser performers more appropriately by gaining an understanding of where, how, and why these lesser performers are inherently different.  Additionally, moving forward, hiring to a profile that leads to success and aligns to your culture will create greater cohesiveness among your teams. 

Skills, knowledge, and experience are rather straight forward aspects of an individual to measure and assess.  These elements of a candidate are fairly easy to evaluate during an interview, reference check, or even a simple resume screen.  However, it is the more personal, value-based aspects of employee and organization that determine success or failure of fit.  The importance of alignment between your company’s culture and the values and goals of your employees should never be underestimated.

Since the release of the April 2008 OFCCP guidelines update and some recent case law, the determination process now includes looking at the actual tools and systems used within the selection and promotion systems.  Validity and reliability tests will be completed by OFCCP’s new statisticians on these tools to ensure that they do not treat protected classes differently than they treat comparison groups.   In the old days, OFCCP audits were not too bad.  Today, they look like the process EEOC uses to evaluate disparate impact.

This new OFCCP analysis for disparate impact includes a thorough review of:

1. the Job Analysis results in which the skills, knowledge and abilities and personal characteristics were evaluated within a particular job are identified
2. how these skills, knowledge and abilities map back to the specific steps of the selection, promotion or termination processes
3. how tests that are administered in fact measure the skills, knowledge or abilities essential for success in the position
4. the job description, to ensure that it is current and accurately reflects the essential functions the position  within the company’s own environment

This much more rigorous assessment of selection, promotional and termination criteria could cause significant difficulties for many employers who are relying on old, non-existent practices or those who allow their hiring managers to utilize their own preferred processes.

The environment is further compounded through the use of popular internet selection systems, where potential candidates are allowed to apply for any job opening or can post their resumes on job sites whether they meet the stated qualifications or not.  Job seekers can perform searches to attach their resume to any number of open and advertised positions, with little consideration for the job title or understanding the selection process of the company offering the position.  Recent guidelines hold the potential employer accountable to track race, age, gender, and ethnicity data about all applicants.  This is why, at ECI, we added the tracking criteria to our eci-assessments site for all test takers.  When employers need the data, it will be available for all candidates who reached the assessment step.

In the absence of clear definition of an “applicant” by the employer, potential problems arise in determining how to track candidate data and determining whether the applicant is in fact even interested in being considered for the position.   When employers have no standardized steps in their selection process, if the selection criteria is vague or if the steps are very loose, then almost every person who provides information may be considered a viable candidate for the job opening, regardless of whether they meet the qualifications for the job or not.

While the OFCCP has recently released guidelines on who internet “applicants” are, these guidelines are quite broad and can be troublesome when the employer has no additional, consistent steps through which all applicants must pass before becoming a candidate for consideration.  Having in place a selection process that includes multiple, valid, job-specific criteria against which applicants are assessed is the first step, but not the only step necessary to comply.[2]

Many companies incorporate on-line, computer or paper-based testing within their processes to evaluate a candidate’s particular knowledge, behavioral skills and abilities.  Any tests that you use should meet the standards for testing set out by the American Psychological Association and should follow the guidelines set forth by the EEOC.  Online tests fall under the same rigorous standards as do all other types of tests used for selection.

Best practices for testing and selection cited by the EEOC[3] include:

1. Employers should administer tests and other selection procedures without regard to race, color, national origin, sex, religion, age (40 or older), or disability.

2. Employers should ensure that employment tests and other selection procedures are properly validated for the positions and purposes for which they are used.  The test or selection procedure must be job-related and its results appropriate for the employer’s purpose.  While a test vendor’s documentation supporting the validity of a test may be helpful, the employer is still responsible for ensuring that its tests are valid under the Uniform Guidelines for Employment Selection Procedures.[4]

3. If a selection procedure screens out a protected group, the employer should determine whether there is an equally effective alternative selection procedure that has less adverse impact and, if so, adopt the alternative procedure.  For example, if the selection procedure is a test, the employer should determine whether another test would predict job performance, but not disproportionally exclude the protected group.

4. To ensure that a test or selection procedure remains predictive of success in a job, employers should keep abreast of changes in job requirements and should update the test specifications or selection procedures accordingly.

5. Employers such ensure that tests and selection procedures are not adopted casually by managers who know little about these processes.  A test or selection procedure can be an effective management tool, but no tool or selection procedure should be implemented without an understanding of its effectiveness and limitations for the organization, its appropriateness for a specific job, and whether it can be appropriately administered and score.

Or is your test used as a tool to provide additional information to support your interview process?  In either case, the

results from any test should not make up more than 20% of the hiring decision in order to comply with fair selection

standards.  The results from tests, such as personality measures, can enhance the reliability and validity of your

processes, providing that these tests have been professionally prepared and rigorously validated.  Ensuring that any

tests you administer are in fact valid and reliable, and that they are shown to be valid and reliable against your own

population and environment, are additional steps you will need to complete.

It is no longer acceptable to take the word of your outside test or system provider that tools or a criterion is valid.  You will need to ask to see the diligence that went into validation and reliability studies by requesting the technical report or validation report for these tools.  These reports should include item analysis, EEO scores comparison for protected classes, show that no disparate impact results through the administration of the tool, and should provide statistical data concerning face validity and content reliability, all based on a statistically significant population of results.  If no report is available, or the study lacks rigor, you should immediately find another, more valid assessment tool.

Also, your test or system provider should have professional experts who can revalidate their tools against your jobs and in your own environment.  They should be able to show that no adverse impact occurs as a result of the use of their tools for your particular jobs through a statistical study process. If your providers cannot do this for you, look for another vendor.

Employers worry that if they put a test into their selection or promotional process that managers will rely too heavily on the results.  This can be a pitfall of such tools, since most well-constructed tests tend to be quite accurate in the results they produce.  If the selection process lacks sufficient steps, or if the steps are not effective, managers probably will resort to trusting the test to make the decision.

With the recent release of the OFCCP and EEO updated selection guidelines, new rigor is required for any selection or promotional system, including test validation.  “Validation” used to mean “we put together focus groups of our best employees, who provided their ideas on what success looks like in our own environment.  We used that input to develop our selection system and/or our competency model.”

Or a testing provider would suggest that you test 5 or 10 or your top performers in a specific role and establish a selection standard based on the results.  Whereas these approaches might have been overlooked in the past, they will not meet the new guidelines established through the Department of Labor, the OFCCP or the EEO Commission. Today, validation means that your company gathered and used statistically reliable data about your jobs to create selection, promotion and career tools and decisions.  It means, for example:

• that you have up-to-date, accurate job description for the position that includes Essential Functions, the context of the position, background and experience levels and reporting relationship
• that you did not incorporate any process or step that has adverse impact in screening out or negatively impacting protected classes either in selecting, promoting people, or establishing a dismissal process
• that you assessed the job using objective and accepted methodology, such as ADA compliant Job Analysis
• that you were able to determine through your data collection process the acceptable business necessity of why the criteria you are using for selection or promotion is essential to perform the job in your business environment
• that you are able to show a clear linkage between the selection criteria you have identified to the actual steps you use within your selection or promotional processes, and finally,
• that your selection and promotional criteria has passed a number of tests of statistical significance to show that the criteria you are using in fact does not show statistical and practical significance between protected classes and the comparison group when disparate impact is being assessed.

These are, however, only a part of the issues that you must consider as you devise selection, promotion and career processes or make decisions about the people you employ.  If your company has greater than 100 employees, and/or if you are a government supplier with contracts of more than $50K, then your company must comply with the  new OFCCP guidelines.

Tomorrow, we’ll write some more about how to develop compliant selection standards.

So the first issue we faced was how to design a survey process to gather sufficient valid data to determine whether consistent application of the competency factors actually resulted in higher sales, performance ratings or customer satisfaction rates.  We deployed a survey process first to representatives, asking them to rate their own abilities in consistently demonstrating various behaviors within the competency model.  Next, we ask the reps’ managers to rate the reps’ performance in consistently demonstrating the competency behaviors.  After we had all this data, we compared the responses to actual sales results to see if in fact there were significant correlations between consistent demonstration of competency behaviors and higher sales results.

Those reps who rated themselves, and whose managers rated them, higher were significantly producing increased sales.  The conclusion then, is that if you create a competency system that is relevant to the factors that lead to success, and the factors/behaviors are consistently demonstrated in daily activity, you will get better sales results.  Here we were able to produce actual numerical correlations of the relationship between consistent demonstration of competency behaviors and higher sales results.

Everyone has felt that there was some sort of relationship between competency and results, but to actually measure this using individual ratings and statistical correlation in a very straightforward way has rarely produced significant results.  In our study, we have shown that it is the consistency with which the individual demonstrates the described behaviors which results in higher productivity and better performance ratings, as assessed by managers and by individuals.

We are just entering the last phase of our survey process, which is determining whether customers note the consistent demonstration of competency factors during their activities with reps.  We’ll let you know if we find a correlation between the customers’ perceptions of competency and actual sales results, once our survey results are in.

If you are interested in learning more about how ECI can help you to measure the relationship between your performance management system and actual productivity of your people, give us a call at (908) 806-3444.  We’ll be happy to speak with you further about the process.