Almost every business uses essentially the same model for hiring employees. It’s usually some combination of interview, test, application, with the outcome being that you hope to select the best person for the job.
But, problems arise when you don’t know if your selection measures actually predict future performance. That is, are you picking the people with the best possible future performance?
The Performance Problem
The major goal of every selection system is trying to make sure that you hire the best people for the job. When you hire the people who have the best fit for the job and the organization, you’re going to have happier employees who perform well and work as a part of a cohesive group. That’s the problem that many companies don’t necessarily address well, and when handled poorly, it can spell disaster for your bottom-line.
When you’re building your selection system, it’s important to make sure that you link your selection criteria with eventual performance. Don’t just make assumptions about some tool determining performance; check it. For example, if you’re using an unstructured interview and employees are being hired based on how nice they are, but “niceness” doesn’t actually enter into the job, then eventual performance may not be predicted by the interview score. Thus, you’re just throwing money away on that particular tool.
The Legal Problem
The major legal hurdle that almost all selection systems run into is adverse impact. Adverse impact is when a selection measure picks a person on something like race, sex, or age. It’s a pretty well-documented fact that almost all selection measures have some sort of adverse impact inherent in them. The serious problem that can create a legal nightmare for a business is when a measure has adverse impact, but it’s not predicting future performance.
Not only do poor selection tools lead to legal issues, they may also cause problems for business production. So, even if a business were able to ignore the issue of adverse impact, it’s still spending money on a selection system that doesn’t do anything. In essence, you’d probably be better off just picking someone at random. That selection process would cost less with about the same effectiveness.
Title VII and You
But all of this only applies to the big boys, right? Not at all.
Title VII of the Civil Rights Act of 1964 states that if you have 15 or more employees, then you have to worry about unintentional discrimination. Additionally, there are different state statutes that can fill in gaps in the federal EEOC guidelines, which might apply to businesses with as few as 6 employees.
And in the case of the EEOC and discrimination an ounce of prevention goes a long way. If you’re ever targeted for an investigation, the EEOC is much happier with you if you’re prepared with a technical report and analysis of your selection system in hand, than if you’re unprepared and have to start looking when they first contact you.
To really make your selection efforts work for you, you should be able to know what each part of your selection process is selecting on, and what adverse impact it has. If you lack this knowledge, you’re at the mercy of luck. When you don’t know what your selection system is doing, it’s a lot more like flipping a coin to pick who you’re hiring.
You can find out what your selection system is predicting by performing an analysis of it and other pieces that can impact it. If the results show that a selection measure isn’t picking the best people, you can move to choosing a new method or redesigning what you’re currently doing. Once you have that knowledge, you have the confidence that what you’re using is getting you you the most for every dollar you spend.