Red Flags for Hiring
The “Reverse Peter Principle”
The Peter Principle says that managers tend to get promoted to their level of incompetence. The Reverse Peter Principle says that no longer do managers need to get promoted to their level of incompetence because it will come to find them!
Today, customers are evermore demanding. Decisions are increasingly complex. Ambiguity is the rule. Managers must manage more than their jobs…they must manage a constant stream of initiatives to improve their business. Managers may top-out just by sitting still.
Performance requires more talent than in the past, for multitasking, prioritizing, judgment and execution. To maximize talent, personnel decisions must be made thoughtfully and skillfully.
All organizations make hiring or promotion mistakes. When mistakes are made, organizations must then cope with performance problems such as poor judgment, undisciplined work habits, poor follow-through, abrasive social skills or failure to delegate. Typically, success rates for personnel decisions are in the 50-70% range. Predicting human behavior is a high-risk game.
It is also a high-stakes game. Mistakes cost money, especially if the underperformer must be released. Here are some of the direct and indirect costs associated with bad personnel decisions:
This picture is even more compelling for a General Manager or CEO. A poorly performing GM, let’s say in a $100mm business, can easily cost your organization in excess of $1mm annually.
Estimated Total Cost for a Failed Hire
The Peter Principle says that managers tend to get promoted to their level of incompetence. The Reverse Peter Principle says that no longer do managers need to get promoted to their level of incompetence because it will come to find them!
Today, customers are evermore demanding. Decisions are increasingly complex. Ambiguity is the rule. Managers must manage more than their jobs…they must manage a constant stream of initiatives to improve their business. Managers may top-out just by sitting still.
Performance requires more talent than in the past, for multitasking, prioritizing, judgment and execution. To maximize talent, personnel decisions must be made thoughtfully and skillfully.
All organizations make hiring or promotion mistakes. When mistakes are made, organizations must then cope with performance problems such as poor judgment, undisciplined work habits, poor follow-through, abrasive social skills or failure to delegate. Typically, success rates for personnel decisions are in the 50-70% range. Predicting human behavior is a high-risk game.
It is also a high-stakes game. Mistakes cost money, especially if the underperformer must be released. Here are some of the direct and indirect costs associated with bad personnel decisions:
- Salary, benefits and recruiting costs
- Compromised productivity and quality
- Turnover of de-motivated staff
- Damaged customer relations
- Opportunity cost
This picture is even more compelling for a General Manager or CEO. A poorly performing GM, let’s say in a $100mm business, can easily cost your organization in excess of $1mm annually.
Estimated Total Cost for a Failed Hire
Manager $30-100k
Director $100-400k
Director $100-400k
VP $200-800k
GM $500k – 2mm+
Red Flags
To make good personnel decisions, you must assess candidates’ competence. Some competencies are easy to assess, e.g., industry experience, technical knowledge, verbal skills, or any behavior that can be directly observed in an interview. Other competencies are harder to assess, such as management style, character and core values.
In over twenty years conducting candidate assessments we have identified certain behavior patterns that are linked to performance problems. These “red flags” are often evident, but go undetected. The chart on the Download summarizes behaviors we have found to be most problematic.
To make good personnel decisions, you must assess candidates’ competence. Some competencies are easy to assess, e.g., industry experience, technical knowledge, verbal skills, or any behavior that can be directly observed in an interview. Other competencies are harder to assess, such as management style, character and core values.
In over twenty years conducting candidate assessments we have identified certain behavior patterns that are linked to performance problems. These “red flags” are often evident, but go undetected. The chart on the Download summarizes behaviors we have found to be most problematic.
