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The Three Most Important Things When Hiring

Wednesday, May 24th, 2017

https://www.flickr.com/photos/mauropm/3436674445/

I’ve worked with and spoken to thousands of hiring managers over the course of my career.

They all want to hire the best people available and will go to great lengths to do it.

Sure, some work harder at hiring than others, but they all want a hire that succeeds.

Some look hardest at skills.

Some at accomplishments.

But the most successful managers focus on three character traits, before anything else.

Attitude, aptitude and initiative.

Attitude: Skills can grow and tech can be learned, but energy expended on changing someone’s attitude has the lowest ROI.

Aptitude: Things change. Not just tech, but rules, bosses, buildings, colleagues, and anything else you can think of; an aptitude for change can mean the difference between success and frustration.

Initiative: Going beyond the job description; doing more than expected; not for a reward or the glory, but because that’s who you are.

That’s how you build an organization that succeeds and makes you look great.

Attitude. Aptitude. Initiative.

Image credit: Mauro Parra-Miranda

Ducks in a Row: Value-Based Compensation

Tuesday, April 18th, 2017

https://www.flickr.com/photos/gardener41/1452771619/

Yesterday we considered the error companies make by basing offers on salary history, instead of future performance.

That may be about to end, at least in the outliers of Philadelphia and New York City.

In short, the law prevents employers from asking candidates about their current/previous compensation.

Candidates can volunteer the information, but can’t be asked for it by the company or any recruiting process, including third parties.

Doing so opens them up for lawsuits.

Ignoring implementation and legal hurdles, what does it really mean and why do I see it as such a positive?

Primarily because I don’t believe that either performance history or salary history has a damn thing to do with the value candidates bring to their next job.

Companies need to have a hiring range for each opportunity based on the impact that specific position should have on the company’s success.

The low end is based on average performance, while the high end is the result of an over achiever in the position.

The offer should be the highest number within the range based on the hiring manager’s evaluation of the candidate in light of two strong constants.

  1. 98% of star performers become stars as a function of their management and the ecosystem in which they perform.
  2. People who join for money will leave for more money.

Merit raises are then given based on that individual’s actual contribution to the company’s success, as opposed to some number from HR.

This puts most of the responsibility on the hiring manager — exactly where it belongs.

Image credit: gardener41

Golden Oldies: Pay For Performance

Monday, April 17th, 2017

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies are a collection of what I consider some of the best posts during that time.

Money. Everyone’s favorite subject that no one wants to talk about. Especially when it comes to work, as in, “what were you making previously” and “what are you looking for now?”  

Tomorrow’s post focuses on a new law enacted in Philadelphia and New York City that has the potential to change that entire, unwanted conversation, forcing managers/companies to focus on the future, as opposed to history.

Read other Golden Oldies here.

starIn a post last week I asked for opinions on the ideas presented in a series of articles in Business Week on managing smarter but especially one that claims that “treating top performers the same as weaker ones is ‘strategic suicide’” and said I would add my thoughts in a future post.

Bob Foster left two interesting comments (well worth your time to click over and read). Regarding pay for performance he tells the story of a company where everybody from the CEO down all quit.

“Taking on the task to salvage the company, I hired new people that met unusual qualifications: they had to be qualified for the job they were applying for; they had to be unemployed and available immediately; they had to work at sub-standard wages; they had to work while knowing the company could close at any minute; and they had to work without supervision. The team that came together produced a highly successful company, and it was not because of high pay, or performance bonuses (there were none). The team stayed together, and performed, because of mutual respect, trust, appreciation, and consideration—people were ‘valued.’ To me, this is the truest form of ‘pay for performance.’”

I agree that trust was one of the key ingredients in what Bob accomplished, but it wasn’t the only one—or maybe I should say that it needs to be based on fairness and honesty.

Bob says the pay was ‘sub-standard’, but I assume that it was universally sub-standard relative to position and experience. If he had chosen to pay part of the team, say 10% more than their peers, the team wouldn’t have coalesced.

And that is exactly why I disagree with the idea of paying top performers, AKA stars, big sign-on bonuses or higher salaries than their peers.

  • Based on my own experience, 98% of star performers become stars as a function of their management and the ecosystem in which they perform. Change the management, culture or any other parts that comprise that ecosystem and the star may not survive.
  • Just as a chain is as strong as its weakest link there is no star in any sport, business, media, etc., who can win with a team that is subject to constant turnover and low morale.

Consider this common example.

Two people are hired at the same time with the same background, same GP0 and similar work experience, but with the one exception. One graduated from a ‘name’ school and the other from a community college. Starting salary is $50K, but the manager adds a 20% premium to the first candidate’s offer on the basis that she must be better to have gone to that school.

Neither candidate lived up to their potential because the manager made poor choices. In doing so he set both up to fail but for different reasons; one thought she had it made and the other that he was low value.

Merit bonuses fairly given for effort above and beyond acceptable performance levels make sense as long as they don’t come at the cost of developing new talent.

But one problem with ‘pay for performance’ is the pay often comes before the performance, but there are others and I’ll discuss them more Thursday. In the meantime, here are links to five posts from 2006 that give more detail on the trouble with stars.

Stars—they’re in your MAP

More about stars and MAP

Rejects or stars?

Star compensation

Retaining Stars

Image credit: sxc.hu

There were several interesting comments on the original post; check them out.

Golden Oldies: Insanely Smart Retention and Stars

Monday, April 3rd, 2017

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Jerks. Turks. Stars. Bro culture. Definitely insanely stupid. I wrote this exactly six years ago and nothing has changed; if anything, it’s gotten worse and the post is yet more applicable.

Golden Oldies are a collection of what I consider some of the best posts during that time.

Read other Golden Oldies here.

3937284735_35e9f47fb3_mAre you already a devotee of insanely smart hiring, in the process of changing after reading insanely stupid hiring or somewhere in-between?

Wherever your MAP is on the subject there is one thing about hiring that you need to wrap your head around if you want your career to flourish.

You can not hire stars, but you can create and maintain them.

This is as true of executives and management as it is of workers at all levels.

Think of hiring in terms of planting a garden—only these plants have feet.

You’re at the nursery and find a magnificent rose. It’s large, because it’s several years old, has dozens of blooms and buds and is exactly what you wanted for a particular space in your yard.

The directions say that the rose needs full sun to thrive, while the space in your yard only gets four to five hours of morning sun. But the rose is so gorgeous you can’t resist, convincing yourself that those hours from sunrise to 11 will be enough, so you take it home and plant it.

It seems to do OK at first, but as time goes by it gets more straggly and has fewer and fewer blooms.

Finally, you give it to your friend who plants it in a place that gets sun from early morning to sunset.

By the end of the next summer the rose is enormous, covered in blooms and has sprouted three new canes.

One of the things that insanely smart hiring does is ensure that people are planted where they will flourish, whether they are already thriving or are leaving an inhospitable environment.

I said earlier that people are like plants with feet. Abuse a plant, whether intentionally or through neglect, and it will wither and eventually die; abuse your people and sooner or later they will walk.

Insanely smart hiring also gives you a giant edge whether the people market is hot or cold.

By knowing exactly what you need, your culture, management style and the environment you have to offer you are in a position to find hidden and unpolished jewels, as well as those that have lost their luster by being in the wrong place. (Pardon the mixed metaphors.)

These are often candidates that other managers pass on, but who will become your stars—stars with no interest in seeking out something else.

They recognize insanely smart opportunities when they see them.

Flickr image credit: Ryan Somma

If the Shoe Fits: Who Do You Ask?

Friday, February 17th, 2017

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

5726760809_bf0bf0f558_mHow many members of your team have been “bloodied in combat?”

How many have worked successfully through multiple economic (upturns/downturns) realities?

Who would you ask if you needed dynamic (question/discuss), as opposed to static (online postings), advice of “the been there/done that” variety to

  • land a candidate;
  • sell in a recession;
  • tweak/kill a marketing campaign;
  • beat the competition; or
  • Layoff a team member?

Don’t ask me; I’ve answered this question multiple times in varied forms.

Instead, ask millennial Tom Goodwin.

Maybe you’ll listen to him.

Image credit: HikingArtist

John Wooden On Stars

Wednesday, February 15th, 2017

https://en.wikiquote.org/wiki/John_Wooden

In spite of being severely overloaded, KG still finds time to send me stuff he finds interesting and/or inspirational.

Over the years, we’ve had many discussions about culture and its importance in hiring.

He recently mentioned a quote from basketball player and Coach John Wooden.

“The main ingredient of stardom is the rest of the team.”

KG: In any high performing organization, there are lots of systems and processes that make the organization successful.

When you look at people considered stars, they are almost never part of second or third rate teams; they are almost always in organizations performing at the highest levels.

This doesn’t mean that there aren’t truly high performing people in lesser teams, it’s just that they are not defined as stars in general (sometimes they may be local stars, but generally don’t get the full recognition).

So a star, per definition, is a member of an organization that performs at the top.

Me: So true. I’d add that in most cases people become stars as a result of the culture and their manager, or so I’ve found.

KG: Exactly. Look at all the people who leave Goldman Sachs or Google who were stars there (e.g. Marissa Meyer) but are unable to maintain their level of performance outside the culture & systems of that environment.

That’s why it’s always dangerous to hire stars — more than anything else they are a product of their environment.

Me: Absolutely, and the poster child is GE’s Bob Nardelli!

(Click for more Wooden wisdom. For more information about stars and Nardelli use use the tags below.)

Image credit: Wikipedia

Role Model: Craig Zoberis and Fusion OEM

Wednesday, January 25th, 2017

http://www.fusionoem.com/

In 1914 Henry Ford doubled his workers’ daily wage, much to the consternation of other magnates, who believed, as do most of them today, that success comes from paying as little as possible.

Ford, however, believed that he would benefit if his workers had disposable income and he was correct; they used the extra money to buy Fords.

The same holds true today; modern research has proved that higher wages increase profits.

Businesses, from very large to very small, still don’t believe it and scream at the thought of a so-called living wage.

But not all of them.

Fusion OEM at just $12 million is considered very small, but it’s profitable and founder Craig Zoberis is very happy, because he is meeting his twin goals.

While lots of other manufacturers have moved operations to China or Mexico, Zoberis has kept his plant in the United States – and considers it a point of pride to pay his 55 workers above-market rates. Workers with no experience start at $14-an-hour, he says, and by completing training and gaining skills can reach $18-to-20-an-hour, plus overtime and bonuses, for total pay near $50,000 a year, within a few years.

Zoberis doesn’t expect his people to buy his products, but he did want to have a  place to work that matched his MAP and not his father’s.

My father and his partner never did a good job of hiring the right people with the right attitude. I wanted to be excited to go to work every day, and working for my father’s company, I was not.

Fusion OEM has never had a layoff, but finding great workers in its industry is just as difficult as finding great programmers, hence the need for a creative, long-term solution.

My colleagues were always complaining that there aren’t enough skilled workers who have the right attitude. When I talk about skilled workers I’m talking about machinists (…) What we discovered halfway through our life at Fusion is that we couldn’t always look outside for skilled people. We decided to hire for attitude and train for aptitude.

Fusion OEM is enjoying double digit growth, but Zoberis isn’t interested in taking outside investment. He loves going to work, saying, “This is my hobby, my income, my life,” and knows that hyper growth can kill you.

You can’t grow your company any faster than you can get the right people. If it goes too far, you might go beyond your capabilities and you’ll fail.

The interview is well worth reading, especially their approach to hiring and compensation.

I rarely make predictions, but in this case I feel pretty safe making two.

  1. Zoberis will continue building his company, growing his own people and being a management outlier.
  2. Most companies of whatever size will continue to treat people as disposable, pay them as little as possible and bitch about them to whomever will listen.

Image credit: Fusion OEM

Interviewing Fly-On-The-Wall

Wednesday, January 18th, 2017

https://hikingartist.com/2015/10/21/cutting-of-the-branch/

This is a short post, because you need time to read the links.

It doesn’t matter whether you are a CEO building an executive team or a newly promoted supervisor, interviewing is critical to success — the team’s, the company’s and, especially, yours.

The most important things to learn from your interviewing aren’t about hard or soft skills.

The truly critical factors are

  • how they think; and
  • their attitude.

That should be the “make or break” information you come away with.

There’s a lot of help to be found here; look in the hiring category and use the various interview* tags — and, of course, today’s links.

Asking slightly off-the-wall questions that candidates can’t prepare for is a good technique as long as you have a valid goal in mind — one that is well beyond just being discomforting.

The technique is used by CEOs from companies diverse companies, including Tony Hsieh of Zappos, Stormy Simon, president of Overstock and Ashley Morris, CEO of Capriotti’s Sandwich Shop.

Use them as a guide, because the same questions probably won’t work for you. First, they will become well-known as they are passed around the digital world, and second, because they won’t be relevant to your particular situation.

Now, a moment of interviewing levity, better know as “candidates say/do the strangest things” or  WTF?????

“It’s hard to say why a candidate would do some of these things,” Rosemary Haefner, chief human-resources officer for CareerBuilder, tells Business Insider. “Maybe he or she is nervous, thinks an employer would find it funny, or perhaps the candidate simply has no boundaries.”

More than 2,600 hiring managers and employers shared with CareerBuilder the most memorable job-interview mistakes candidates have made. Here are 25 of the most unusual things that happened:

I sent this link to several friends; here is the response of one who is a senior manager at a large industrial enterprise in the southeast.

I’ve been offered a blow job, been asked out, been introduced to the “cruising” area of my city, threatened with a sexual harassment suit and shouted at. Interviewing is no joke…

Managers are still sticking their respective feet in their respective mouths.

Don’t be one of them.

Image credit: Hiking Artist

Golden Oldies: Paying For Hires Upfront

Monday, January 2nd, 2017

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies is a collection of what I consider some of the best posts during that time.

Greetings and welcome to 2017. I thought we’d start the year out with a bit of critical hiring wisdom, especially since hiring so-called stars is still high on most founders’ agendas.

The problem is that hiring often reverses the old adage, ‘one man’s junk is another man’s treasure’ and the promised star is, in the new environment, a dud. (Note: the compensation described is from 2007.)

Read other Golden Oldies here.

My entire career, even when I was a headhunter, I’ve condemned guaranteed pay packages and sign on bonuses, whether stock or cash, because of a passionate belief that people who join just for money/stock have no loyalty and will leave for more money/stock and that what a person did for their previous employer is not a guarantee of what they will do for their next one.

Obviously, my efforts have had no impact whatsoever, outside of my own clients, especially in the executive suite.

The practice is now so common that it’s been named the “golden hello,” a sure sign of broad acceptance.

Such packages are based totally on candidates’ historical actions for another company, frequently in a different business, their interviewing/negotiating skill, charm, and the threat that doing so is the only way to acquire their talent.

Just how much is all this worth? Penny gave its new COO “…a base salary of $750,000, to be reviewed annually starting in 2007, with a cash bonus that could be as much as 150 percent of her salary…stock option awards and restricted stock awards valued at more than $20 million in recognition of forfeited benefits at her former employer, Capital One, as well as a minimum cash bonus for 2006 of $1 million.”

She was fired six months later, because “…Ms. West not being a good fit for the company,” according to Deborah Weinswig, a Citigroup analyst.

Further, “…Ms. West had a severance agreement and that the retailer intended to honor its terms.” and you can bet that her golden goodby will contain a goodly portion of her golden hello.

I understand executive paranoia and the desire not to lose what they already have, but change always involves risk.

Penny isn’t talking, but if the analyst is correct about the fit, why was Ms. West hired in the first place?

Who wrote the job description? Who interviewed her? Who checked her references? Who thought she was such a good fit that it was worth doing anything necessary to land her?

“Who,” of course, is plural, nobody, especially at senior levels, is interviewed by just one person any more.

That’s why I keep telling my clients that, as their companies grow, they must make hiring, including skilled interviewing, a core competency at all levels.

How to be Dumb as Google

Wednesday, October 26th, 2016

https://www.flickr.com/photos/ficusrock/5716144109/

When it comes to hiring, as Forrest Gump would say, “stupid is as stupid does.”

And stupid is using recruiters who think the only “right” answer to a technical question is the one written on a sheet of paper. (Note that “technical” can refer to the specifics of any field, although in this case it was software.)

No knowledge or understanding of the subject; just the blind focus on the written words — kind of like talking to customer service when the rep keeps repeating their script no matter how you phrase the question — and no recognition that they may wrong.

The call started off well but as the interview progressed, Guathier got an increasing number of questions wrong. His frustration grew as he tried to discuss the answers with the Google recruiter only to find that the recruiter wanted the exact answer in the test book even if alternative solutions were better.

The company is Google and it should be noted that they approached the candidate, as opposed to his applying.

Way back in 2007 Google announce that they had developed an algorithm to screen candidates.

It didn’t work.

Google was also famous for its brain-teaser questions.

Only, according to Lazlo Block, SVP of People Operations, they are a lousy predictor of success.

“Part of the reason is that those are tests of a finite skill, rather than flexible intelligence which is what you actually want to hire for.”

The value of elite colleges and high grades was publically debunked in a 2013 story about the prevalence of grade inflation.

Not all Google’s efforts fall in the stupid category; block’s efforts to educate both management and workers about bias is definitely a smart move.

But locking technically ignorant recruiters into accepting only set responses to tech question rates right up there with algorithms and brain-teasers. And I say this as someone who was a tech recruiter for more than 12 years.

Of course, managers’ interviewing skills won’t matter, since  the best, most knowledgeable, most creative candidates will be screened out before they ever see them.

Image credit: Chris Pond

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