Like a lot of people, you may think effective interviewing and talent evaluation is an art.
Example: http://msspnexus.blogs.com/mspblog/2006/10/hiring_the_righ.html

I disagree!

People often describe something as magic or art when they don’t know how to reliably create a result they want. In this case, I know better because I can interview and pick great employees almost every time. Most hiring managers only pick winners 25-40% of the time. I used to have a low success rate, too. Then, I learned how to effectively interview and evaluate and get it right almost every time!

Here’s what I learned and how I evaluate talent:

• Start with a clear Performance Benchmark. If you don’t know what you’re looking for, how will you know when you find it? How would you know if you got a great employee or not!
• Use Structured Interviewing. There’s a lot to say on structured interviews, but basically, you ask the same questions to each candidate, so that you have a consistent way to compare candidates. I use a chronological interview which starts at the beginning and covers the candidates entire work history. For each job or period in a person’s background, I ask:
  • How did you come to work at __________? (Fill in the blank with the next company or job. This is a transition question. I want to know why they left their old job and how they found the new one.)
  • What was the situation when you started the job?
  • What were your one or two best accomplishments? (Great people will both have accomplishments and want to talk about them.) Once you’ve heard the accomplishment, ask how they did it. You want something they really did rather than something they can just take credit for.
  • What didn’t go as well? It’s easier to get this after they’ve talked about accomplishments. Everyone knows things they could do better, so I keep pushing until I get something.
  • If they were a manager, I’ll ask how many direct reports they had. Then I want to know what they did to improve their team and develop their people.
  • Finally, why did they leave the job?
• Evaluate each candidate against the Performance Benchmark. I grade each candidate against each desired result, skill, etc. Because I used the structured interview, I have a lot of data to back up each grade. I can look through my notes to see where they’ve actually accomplished something similar to the results I want. I want to see accomplishments that are both specific and relevant to my open job. If they’ve done it before, there’s a good chance they’ll produce results for me.
• Once I’ve interviewed and evaluated each candidate, I pick the best one and make an offer. Or, if none of them meet my standards, I start over and generate more candidates.

None of this is all that hard, but it does take commitment and discipline. It does require some work! A good structured interview can take 4 hours for an experienced candidate. That’s a lot of time, but how much time does it chew up to have to fire someone or compensate for poor performance. I’d rather spend a couple of man-days getting it right on the front end than spend man-months cleaning it up later.

So please, take the time to get it right, or hire someone to do it right for you (This is one of the services I offer my clients). There’s just no reason to think it’s art or luck that determines the quality of your hires. Take the time and do the work! With a little practice, you can have great hiring results, too!

We were just looking at Performance Benchmarks and importance of having a clear purpose for the role. Now, let’s look at the other key parts — Results and Special Skills or Competencies.

Performance Results

I think the Results section is the most important part of a Performance Benchmark. It says what you want the employee to Get Done. Not what you want them to do or be responsible for. What Measurable Results do you want them to produce!

Usually, you’ll have four or five specific results. Maybe a couple more, but any more than seven is too many. Make each result clearly measurable, and have a specific time frame.

Here are some example results for a Sales Executive:

• Close $400K in sales revenue within assigned territory in fiscal year 2007.
• Identify and close 6 new customers within assigned territory in fiscal year 2007.
• Respond to all inbound leads within 24 hours.

Of course you have to also have the ability to accurately track each result. The point is that anyone — Employee, Manager, Mail Clerk — Should be able to easily know whether the result was accomplished or not.

Special Skills & Competencies

This is the area for any special requirements. If your new employee needs to have experience in Outsourcing to Far East Manufacturers or Oracle Database Administration, this is where that information goes.

Also, if your company uses some standard competencies like Good Communicator, Persuasive, Team Player, put them here if they are important to the job. If it’s not important leave it out!

Do you know the two competencies most associated with top talent?

• Resourcefulness - The ability to find a way to get something done.
• Self Awareness - Accurate understanding of their strengths and weaknesses. They will also know how to leverage their strengths and compensate for their weaknesses.

The Performance Benchmark is the cornerstone for any company that is serious about great performance. Use it to evaluate both existing employees and potential candidates.

We’ve established that using Performance Benchmarks is one of the best practices you can adopt. So let’s get started:

I recommend a Performance Benchmark include three key sections:

• Purpose - Overall, why are your hiring a person for this role?
• Results - What results do you expect a great employee to produce?
• Skills & Competencies - What special skills or other characteristics would a great employee need?

Purpose

Why are you hiring someone for this role? Answer like this: “The ROLE NAME at COMPANY exists to ________.” As an example: “The CEO of MyCo exists to grow the company by 15% per year while maintaining 20% profitability.”

Keep it simple and don’t try to cram everything in there. Sure, you want your CEO to maintain compliance with relevant laws, avoid lawsuits, develop people, and a bunch of other stuff. But, what do you really care about? Be Straight! This isn’t the place to sound good! Having a clear purpose sets the context for the job, creates clarity, and helps you get started defining the results you want.

Next, we’ll look at defining and specifying results.

See Part-2 of How to Benchmark Performance.

For evaluating candidates or employee performance, it all starts with a good Performance Benchmark. The Performance Benchmark sets the standard for the job in terms of specific results!

If you want one tip to improve your company, this is it! I’m always amazed how rarely managers create and use Performance Benchmarks. But, Why? I think there are a number of common reasons:

• It’s work to think clearly. Muddled, imprecise thinking is easy. Clear, sharp thinking takes a little work. Not a lot, but enough that we don’t do it sometimes.
• Managers have to take responsibility for doing their job. What if all the employees meet their benchmarks, but the group doesn’t? That means the manager didn’t see to it that everything was assigned and communicated. It’s easier to leave things vauge, so you can always blame someone for the lack of results.
• People sometimes resist being measured — At least at first. Employees quickly start to appreciate clear expectations. And they get a sense of accomplishment from surpassing the benchmark.
• What do you think? Please leave a comment if you know other reasons.

OK, hopefully you’re thinking “I’m convinced I should use Performance Benchmarks”! But, how do you create a Performance Benchmark? Well, that’s tomorrow’s topic…  Stay Tuned!

A couple of years ago, I had the opportunity to work with the creators of Topgrading, Brad and Geoff Smart. Together, we created a DVD product that explains how to use a number of different hiring and recruiting best practices that are key to Topgrading.

In an interview (CNBC has removed the video from their website) with Ted Bililies, the Managing Director of Geoff’s company, ghSmart. Melissa Lee, the CNBC reporter, explains how private equity companies routinely engage with consultants to provide a second opinion assessment of planned hires.

At the end of the video, Melissa remarks: $25-35K for evaluating 2 to 3 candidates is a rounding error when talking about multi-million dollar deals!

One of the biggest problems in talent selection is that people fall in love with a candidate. Maybe they are good looking, went to prestigious universities, or worked for several great companies. A persuasive candidate may be great at making you fall in love with them, but not as good at delivering the results you are hiring them to produce!

You probably aren’t putting multiple millions at risk with one hire. Still, making a bad Senior Management hire can cost you $1M or more when you consider lost market momentum, opportunity cost, and disruption on top of the costs of replacing the bad hire, severance, etc.

Isn’t it wise to get a good Second Opinion Assessment when you’re making a key hire? I think Melissa Lee is right — It’s cheap insurance. What do you think?

I’ve been asked to explain why I named this Blog TalentAppeal. Well, the Talent part is easy — Everyone wants to have as much Talent as possible.

From Dictionary.Com ap·peal [uh-peel]

Each of these definitions of Appeal speak to me:

• The world needs more great companies with great people. I’m Appealing for you to focus on bringing talent to your company.
• It helps when your company Appeals to and attracts talented people. You can make your company more interesting to talented people.
• For many managers, interviewing and recruiting are not everyday activities. So, they never really master the skills of evaluating talent. Hiring mistakes are very costly, so I recommend you Appeal your key hires to an expert who can corroborate your judgement.

And that’s why my Blog is named TalentAppeal!