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Productivity vs. Efficiency – What Are the Differences?

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In any given organisation, productivity and efficiency are highly regarded. Most managers and employees get their feedback based on these two factors. But what exactly do we mean when we say productivity or efficiency? Apparently there are some questions around this topic that haven’t been answered yet.

In order to explain the differences between productivity and efficiency, we must first understand what they exactly mean. To put it in simpler terms, we are talking about differences between quantity and quality. It is nearly impossible to obtain 100% quality, while having productivity levels up at maximum. There should be a middle ground in order to optimise your results.

Both productivity and efficiency are absolutely crucial for building a fantastic work ethic. If you manage to learn how to handle both of them and what makes them distinctly important, you and your business will thrive. As a beginner, you may be tempted to focus too much on efficiency and although this isn’t a bad thing to do, understanding the key variables between efficiency and productivity is imperative.

Given the complexity of this issue, insight is required on what these two factors actually are.

Productivity

At its very core, productivity shows you the rate at which products are being developed or a task is being completed.  When you are measuring productivity things get a little more complex than that. You have to take into account whether it’s physical or office work, if the job requires a certain quality factor or the impact a specific industry’s requirements may have on its workers. Nonetheless, productivity is an integral part of any successful company.

Efficiency

Efficiency is all about the comparison between what is really being produced or performed with what can be produced taking into account the same amount of resources, such as: money, time and labour. In simpler terms, efficiency measures whether there is any waste in your company. Depending on the industry you work in, efficiency may be more desirable than productivity, but usually their importance is proportionate.

Efficiency vs. Productivity

Everyone wants to be as productive as possible, but there are always problems of various sorts that keep us from getting the job done. Firstly, don’t waste more time than necessary when completing a task. Try and set your own rhythm and pace and stick to it. Try and write down every step necessary in order to complete a certain task and follow that process religiously. Once you have the whole process set in stone, you will see that the amount of time you require will steadily decrease.

Many people ask if it is possible to be productive and efficient at the same time and the answer is yes. All you have to do is analyse the task at hand and try and find out what it requires more; whether it is quantity or quality.

It all comes down to the importance of the task. As an example, let’s talk about employee enquiries towards the HR department. We all know they must be dealt with in a respectable amount of time. This type of task is considered to be more on the productive side, due to the fact that it is the same process over and over again, with the same forms and documentation that need to be filled out every time. You can finish all the enquiries quickly and with complete certainty that their quality is top notch as long as you deal with them in the correct manner.

With efficiency tasks, most often than not they do not have a precise and by the book approach. These tasks obviously require more time and a high level of due diligence. In this scenario, quality trumps quantity. Of course, every task has a deadline. But if you happen to have the misfortune of dealing with it poorly, it doesn’t necessarily matter too much. You should always work at your full potential, but given the fact that the assignment doesn’t have a methodological way of dealing with it, you have some wiggle room and the possibility to improve it.

As mentioned earlier in the article, it is very important for both productivity and efficiency to be part of your workflow. It provides you with time, expertise and discipline in order to handle distinct assignments. Balancing productivity and efficiency may seem troublesome at first, but once you find it, certain tasks will stop being such a burden on you.

In conclusion, one more idea that is important to remember is this: never sacrifice your work. If you need to do good, solid work then don’t rush it by any means, and when you are looking for quantity don’t get yourself lost in too many details. With this in mind, you can accomplish anything you want. Do the work you have to do the way it was meant to be done and never compromise. It is essential you know and understand the differences between these two practices in order to ensure your work never has to suffer again.

Great People Inside provides easy-to-use tools and processes to attract, assess, match, select, onboard, manage, develop, benchmark and maintain workforces anywhere in the world.

We help you find the right talent, the best fit for the job and your organisation. It requires deep knowledge of your own organisation’s culture and keen understanding of the candidate’s personality, strengths, interests, work style and other characteristics. The GR8 Productivity Gap tool is excellent at showcasing the evolution of any given employee over time. By contrasting two assessments made before and after training, it allows you to analyse both your employees’ development and their involvement in the process as well.

 

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Sources:

www.smallbusiness.chron.com

www.doityourself.com

www.differencebetween.info

www.selfthrive.com

Skill Gap: Why is it still a Major Concern (Part 2)

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This article is part of a series. For part 1 click here.

There is a steady decline in the U.S. system’s possibility of nurturing these midlevel skills, due to the fact that automation is cutting down the need for low-skilled workers. Luckily, there are local initiatives which are trying to address the respective skill gap in their areas.

A good example on how to narrow the skill gap is represented by internships specifically tailored to college graduates in order to meet the more evolving needs of today’s employers. Some university programs include the so-called “cooperative degree programs” also known as co-ops. This type of approach will allow both employers and future graduates to assess the market and their specific place in the world of work. Employers have the chance to evaluate skills such as: employee attitude and work ethic, but also offering their training to their temporary recruits, specifically tailored to the organisation’s needs. These co-ops and internships help students earn their necessary credit in order to graduate, earn proper work experience, and best of all getting them to apply classroom studies in the real business world.

For over 20 years, there has been a shortage of “transferable” workplace skills, and although there have been many initiatives in terms of laws, guidelines and goals, not many problems have been resolved.

These “transferable” workplace skills have represented a real problem for the private sector for the past 20 years. HR managers have stopped putting too much emphasis on skills such as reading literacy and computational aptitude. In today’s workplace, soft skills are dominating the office needs, and they are as follows: interpersonal and intrapersonal knowledge, time management, ethics, teamwork, personal organisation, interpersonal communication, problem solving, anger management and reasoning.

At a global scale, Millennials display unique attributes that conflict with society and the idea of work as it currently stands. This group of people have spent their entire or nearly entire life connected to technology, rapid accessibility of information and a permanent connection with family and friends. Straight from birth, Millennials have been told they are special and they were rewarded nearly instantaneously for even the smallest of accomplishments.

Millennials are much better equipped to handle active learning that can teach them metacognitive skills. Such operating systems are being beta-tested as we speak, in order to assure the teaching of a higher-order and analytical skills. In the United States, the successful applications of e-learning for workplace training are expected to be introduced into the K-12 curricula where they are foreseen to shrink the metacognitive skill gap in public schools. Games and simulations offer a great basis for education and training, with at least 45% of Millennials being active learners.

In approximately 10 years, companies everywhere will move all types of employee training programs towards the online. Nowadays, distance education done through e-learning is just a stepping stone towards a new structure of education.

The level of information a worker can acquire at the workplace takes half the time compared to the classical classroom delivery, thus retention can be increased by 30% and the cost of training can be reduced by 40%. There will be a quick and positive ROI because employee efficiency is substantially increased.

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Skill Gap: Why is it still a Major Concern (Part 1)

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Although the latest economic recession has ended a few years ago, the rate of unemployment in the United States is still high. This still remains a problem, even though employers are in a continuous struggle to fill certain job posts, most of them in the area of middle-skills jobs: nursing, computer technology, high-skill manufacturing, etc. These vacancies require education at a postsecondary level and in some special cases, even college math degrees or courses. At the moment in the States, 69 million people are involved in middle-skills jobs, which represent about 48% of the workforce. The skill gap is obvious.

The U.S. Bureau of Labour Statistics doesn’t do estimates on vacancies based on skill category, but if we were to combine the data from the government on education and the training requirements needed, it can be discovered that almost 25 million, or 47%, of new jobs that will appear from 2010 to 2020 will be in the category of middle-skills.

CEO’s and HR leaders need to figure out which method of training people will help their organisations fill those vacancies, thus mending the wage stagnation that has engulfed the country and limiting the gap between households with high and low income.

Given the current work climate, companies should take charge and develop programs in which workers can be capable of filling the skill gap. To be realistic, such a thing can happen on a global scale only if companies cooperate with each other, with educational institutions, with unions at both regional and national level.

Businesses rarely disclose any information regarding their expenses on training programs, and when they wish to cut costs, their first target is represented by HR investments. Nowadays, many organisations shy away from training investments because they fear that their competitors won’t make the same investments and they will also steal their workers. In order to minimise this risk, combined investment is recommended. Such collaborative work has been put into effect in a number of countries such as the U.S., UK, Australia and Sweden, with great success.

Read also: Top 7 HR Trends for 2017

Things have greatly shifted since we’ve entered the 21st century. For the majority of the 20th century, people had two ways in which they acquired their skills and prosperity. The first one is, obviously, on the job. Organisations promoted people from within, and it enabled their employees to develop towards higher-level occupations. Unions were invested into negotiating specific career ladders that were directly connected to seniority and skills, and also accompanied employers at an industry or occupational level in order to host various training programs and apprenticeships. Having such a system in place guaranteed a constant flow of talent, very well equipped with skills of the highest level.

A second approach to acquiring skills was represented by college. The American dream has always represented an ideal for any fellow American. Young people across the U.S. were told that in order to achieve the highest peaks of the American dream was to follow the rules and study hard in a field that best suited their talents and interests. However, problems always arise. People with degrees in liberal arts have seen a significant drop in job opportunities. The numbers speak for themselves: only 15% of college graduates have majored in math, science, engineering and technology. This percentage has been a constant for over 2 decades although demand has grown exponentially.

This article is part of a series. For part 2 click here.

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Top 7 HR Trends for 2017

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A great many things will be changing in the HR world this year and they all revolve around one thing: the digital world. Although technology has been and will continuously change the world of work , the vast majority of changes will occur in the way we lead and oversee our companies’ operations. All of the HR trends that will be mentioned below involve ideas on how to “be digital” not just “act digital”.

Nowadays, the world of business is shifting from a “top-down hierarchical model” towards a “network of teams” where people are working in new and dynamic ways to solve problems. Businesses are now centred on the customers, everything around us moves at a very fast pace, thus creating the need for new ways of thinking and doing HR.

Prediction 1: Going further down into the Digital Era: As anyone who hasn’t been living in a cave for the past 20 years may have noticed, these are definitely the digital times. With the number of mobile phones forecasted to reach 4.77 bilion in 2017 and most of the jobs relying on computers to get work done, this year will lay even more emphasis on technology than before. Every employer will have to keep up with this trend, unless he wants to be left behind by  competitors that are willing to innovate with every given opportunity.

Prediction 2: Organisational Design Will Be Challenged Everywhere

Given the fact that, in today’s world, markets are ever-changing and new digital products and services are being developed daily, the conventional approaches do not apply anymore. Since the rapid evolution of the internet and cloud services, the level of entry within a market has been reduced considerably. It is practically impossible to withhold “your market” just because you are a large corporation – a small start-up could reinvent the whole industry right in front of your eyes, and afterwards you are left trailing them for years to come.

Prediction 3: Multigenerational workforce management skills will be required: This year, leaders and managers will have to face a new challenge due to the fact that millennials become increasingly active in the world of work, while, at the other side of the spectrum, many Baby Boomers refuse to retire at the traditional age. This requires new skills from the people in managing roles, since these two generations are as different as chalk and cheese and they have contrasting needs, goals and wishes.

Prediction 4: Culture and Engagement Will Remain Top Priorities

Although these topics might seem recurring, culture and engagement are some of the top priorities for HR managers everywhere. The cultural related issues will become increasingly more difficult to solve. This issue grows in importance. The latest research from Deloitte suggests that Millennials choose their employer based on their respective organisation’s “purpose”. In their latest High-Impact Leadership research, Deloitte discovered that organisations with a strong leadership culture are nine times better at finding and developing leaders than those companies who lack a consistent leadership culture.

Prediction 5: Focus on “Human Performance” and Wellbeing Will Become a Critical Part of HR, Talent, and Leadership

This may come as a shock to you but the overall engagement levels of today are no better than they were ten years ago. Taking into consideration the data obtained from Glassdoor, it has revealed that there is almost absolutely no improvement in employee ratings of their organisations during the past seven years. Approximately 40% of them think that “it is impossible to maintain a fast-growing career and a sound family life” given the “work-martyr” effect in organisations worldwide.

The idea for 2017 is simple – move HR from “personnel department” to a brand new role such as: “consultant in human performance”. There are numerous reasons why people are being held back from being productive at work and these range from: standing at a desk, defective office arrangements and management practices. There is a huge potential for HR in 2017 – to get rid of creating more and more programs that focus on “making work-life better”.

Prediction 6: Talent Recruitment

With all the technology available nowadays, including social networks, wearables and smartphones, talent is more easily accessible and has possibilities to choose form. 76% of full-time workers are either open to the idea of a new job or are actively looking for one, while 48% of employers are struggling to find the right people for their vacancies due to the skill gap. Given this situation, there will be a great emphasis on employee experience due to the fact that organisations are forced to focus more on their corporate culture and values if they wish to retain their best talent.

Prediction 7: There will be a huge focus on overcoming Algorithm Aversion

We have talked in a recent article about the advantages of relying on algorithms, rather than on the biased human instinct, but most HR seniors still face major difficulties when it comes to fully entrusting a computer. This struggle is understandable since the digital revolution happened basically overnight, but in order to take HR to the next level, managers ought to overcome their algorithm aversion and use the much more reliable, computer based, people analytics.

Great People Inside provides through the Next Generation People Intelligence Platform the best solutions and technology needed to find the right talent, the best fit for the job and for your organization. Easy to use and intuitive, the GR8PI Platform acknowledges all the latest trends and foreseeable employment issues in order for your company to thrive in the digital era.

 

 

Sources:

Bersin by Deloitte 2017 predictions

https://workplacetrends.com/candidate-experience-study/

https://workplacetrends.com/the-active-job-seeker-dilemma-study/

http://www.humanresourcestoday.com/2017/trends/?open-article-id=6004358&article-title=top-10-human-capital-trends-for-2017&blog-domain=predictiveindex.com&blog-title=the-predictive-index

http://www.forbes.com/sites/danschawbel/2016/11/01/workplace-trends-2017/#162b91063457

http://hrtrendinstitute.com/2016/11/23/hr_trends_2017/

 

How to attract and retain great salespeople

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In the age of the customer, the consumers have gained significantly more knowledge and control over the sales process than any time in history – they have a huge variety of options available, they are digitally active and they are less dependent upon the sales representatives, and their expectations match up their investment. While the customers’ habits and behaviours have changed, the universal sales strategies have remained basically the same.

In a recent research study done by Cranfield Management School, it has been revealed that 90% of the people working in sales are facing major difficulties in making an effective pitch. That is why good sales reps represent a competitive advantage for every business, if they have them.

Also in regard to people in sales, David Thorp, the director of research and professional development at the Chartered Institute of Marketing had this to say: “First-rate salespeople are focused and can target potential customers effectively. They understand which customers have the money, authority and need to buy from them.” He continued stating that “They also build strong relationship with customers, which is key to customer retention. It is worth investing the time and the money in getting good staff, as they will be able to add much more to an organisation’s bottom line than poor sales staff, which can be a liability.”

The selection you make regarding sales people will determine the success of your organisation. If you are willing to invest time in the selection process, this will solve half of the sales job. Competent sales reps know how to highlight the numerous benefits of your product or service. These people are skilled in detecting possible prospects and quick in surmounting any objections that may come along the way. Sales professionals are able to sell effectively in the most adverse situations and even in the world of cut-throat competition. What makes them so efficient is the fact that they possess an internal drive towards achievement, a fantastic sense of seriousness to sort everything out and accomplish their goals, even when the external factors are detrimental to their cause.

As mentioned above, the selection process is very tedious, but extremely important. This means that even if you find a good sales rep that doesn’t mean you found the most suitable candidate for your organisation. When selecting, there are two key aspectsthat you must take into account, besides the person’s capability to sell:

  1. Is that person compatible with the company’s culture? – If the candidate and the rest of your team do not get along, then it’s crystal clear you do not wish to hire that person. As soon as your sales numbers grow, this will involve support from the other departments in your company. If the departments despise sales, it is absolutely certain you won’t get the profit you expect due to the fact that the sales department won’t receive the help it needs.
  2. Does the candidate understand what exactly are you selling? – If a sales rep doesn’t understand what your organisation is selling, how can you expect them to sell anything? Although they may get lucky a few times, you must be certain that they acknowledge what the company is selling.

In order to get an idea of what a good salesperson is, I recommend you start evaluating every encounter you have as a customer. What are those people doing that makes you feel comfortable about doing business with them? Learning to detect good sales reps represents the first step and it is of upmost importance.

Thoroughly Evaluate your Sales Team

Although sales are an area where results speak for themselves, you must also evaluate the process through which your team does make the sale – it is obviousthat if they don’t have good results, something in their sales process is not working accordingly.

In order to solve this problem, evaluate how your team implements every sales process from start to finish. Afterwards, you can properly assess where they are struggling, why, and help them through coaching. It will greatly benefit them by developing their skills to overcome each step necessary them develop their skills for each step necessary.

Use a Sales assessment for your team

For a proper assessment of your sales force, you need to weigh in your current staff, but also candidates you wish to hire. If you do this in an effective manner, you will know for certain that every sales rep you bring in will possess all the necessary personality attributes to perform at a top level and have high sales results.

One of best ways, if not the best way, to evaluate your staff and candidates is to use assessments such as: GR8 Sales, GR8 Teams and GR8 Engagement. The questions and issues raised by these evaluations will help you determine if the candidates have at least one of these traits:

  • Building Client Relationships
  • Sales Process Management
  • Understanding clients’ needs
  • Enthusiasm
  • Loyalty
  • Respect
  • Perseverance

If the candidates you evaluate score high in at least one of these traits, that means he is a driven individual and there is a great amount of opportunity for success as a “hunter” representative of your sales department. Afterwards, you can have another interview with him in order to be sure that person fits to your organisational culture, thus making an informed decision about a future employee.

How to Improve your Sales Team Results

Offer them as much constructive feedback as possible. You cannot expect your team to improve if they are unaware of the mistakes they are making. This is the reason why it is imperative to have regular meetings with them to offer them support and advice on how they are performing.

When you offer your thoughts on their progress make sure you include both the positive and the negative feedback. In order for your team to improve, they must realise that besides their strengths they also have weaknesses. Nonetheless, keep in mind that negative feedback is for one-on-one meetings only. If you criticise a salesperson in front of his colleagues, he may start resenting you, start working poorly and have a low level of engagement. If this takes place one too many times, high employee turnover is right around the corner, and it can cost your organisation a large sum of money.

Present your team with the best tools and resources for them to thrive

After you evaluate and assess your sales team, by now, you should have a clear idea regarding the areas they are struggling at that moment. Given the fact you have this information, search for the right tools and resources your team requires in order to help them surmount the deficiencies they are encountering.

Let’s say one of your employees is experiencing problems with productivity because he cannot allocate the necessary time for sales calls. For him to overcome this problem, you can research for the right type of scheduling programme to best fit your team’s needs. However, there are situations where your whole team can struggle with productivity. In this scenario, you may have to analyse their working process and establish which tasks can be automated. Implement the automation, leaving your team with more time to sell and less time on unrelated tasks.

The examples I have presented you are just a few ideas of how you can improve your team’s performance, but be aware of the fact that each sales team and person is unique and have their own particular needs. So as to pinpoint the exact problems faced by your team, remember to communicate with them constantly and assist them in finding the best solutions for the best sales results.

Assessing the salespeople, developing them and aligning the sales strategies should become a top priority for the organisations willing to thrive in the customer’s age. Great People Inside helps you find the right talent, the best fit for the job and your organisation. It requires deep knowledge of your own organisation’s culture and keen understanding of the candidate’s personality, strengths, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you find employees who can flourish and reach the highest performance required to constantly bring your company forward.

Request a free demo:

 

 

 

Sources:

www.marketingdonut.com.uk

www.entrepreneur.com

www.nasp.com

www.salesdrive.info

www.quicksprout.com

Overcoming the Recruitment Biases

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Do you or anyone you know have a sixth sense when it comes to recruitment? Is that “sense” completely unbiased and effective? If you answered “yes”, then you are definitely lying to yourselves.

While it is, indeed, true that some people have much more success in recruitment then others,  this happens, most of the times, due to their abilities slowly developed over the course of time and multiple errors.

How do you make up your mind when confronted with a decision? Well, people tend to prefer one of the two following approaches:

One of these approaches is using the “gut feeling”, that has been proven to be successful for them over the years. The main problem with this approach is that it can never be reliable enough. No matter how many times it helped you make the right decision, it will still be just a game of dice next time you use it. And, on top of that, have you ever considered what exactly is this gut feeling and how does it work? Bruce Henderson, founder of the Boston Consulting Group, defined it as “the subconscious integration of all experiences, conditioning, and knowledge of a lifetime, including the cultural and emotional biases of that lifetime.” This doesn’t sound very professional when it comes to recruitment, does it?

The second approach that people use when facing a decision is what they imagine to be the rational analysis. This approach consists of trying to methodically examine all the available information and data in order to reach a conclusion. This may sound as unbiased as it can get, but is it?

In most cases, even while HR managers and CEOs adopt and implement programs that they believe to be free of bias, they still fall short of addressing unconscious biases. Dr. Banaji, a social psychologist at Harvard University, explains that “discrimination is veiled, not explicit, but rather more implicit, unconscious, because we ourselves are unaware of it”.

In his book, Everyday Bias, noted diversity consultant Howard J. Ross points to many studies indicating that these sorts of blindspots are ubiquitous in our lives.  “Virtually every important decision we make in life is influenced by these biases, and the more they remain in the unconscious, the less likely we are to make the best decisions we are able to make.”

Some of these biases include:

Confirmation bias: The tendency for people to seek out information that conforms to their preexisting views, and ignore information that goes against their views. For example, when an interviewer forms a distinct opinion about a candidate based on a minute piece of information such as the college they attended, before the actual interview, he or she is succumbing to confirmation bias. Great candidates may not make it to the interview or be perceived as less competent than others because of these assumptions. Organizations may decrease their chances of hiring great candidates due to interviewing confirmation bias.

Ingroup bias: The tendency to favor members of your own group (or those that you have more in common with). This bias can result in making poor hiring decisions by choosing a candidate entirely based on subjective criteria such as shared interests, hobbies, education, age, professional background or even similarities of appearance or name.

Selective perception: The process of cherry picking the information that we do like to perceive, while ignoring the ones that would contradict our beliefs. This goes hand in hand with the ingroup bias. When we find a candidate that matches our initial preferences, we tend to notice only his or hers positive features, while unconsciously filtering out all the data that would contravene our viewpoint.

Status quo bias: The fact that we would almost every time prefer the familiar things – the ones that we are already comfortable with. This bias prevents diverse hiring by making us prone to selecting the same type of employees that we have chosen in the past.

All of these could interfere with our reasoning, so what can we do in order to overcome all of these biases and use an objective judgment when recruiting candidates?

Anonymizing candidate selection is definitely helpful, but it’s far from enough. Consider using one of these methods to ensure that your organization’s hiring process is bias-free:

One way would be what Dan Hill, an internationally recognized expert on reading emotions based on facial micro expressions and the CEO of Sensory Logic, told us about at the Great People Inside Conference: The New World of Work in Romania (you can see the whole video by clicking here). “People don’t think their feelings; they feel them. So at Sensory Logic we bypass self-reported, cognitively filtered input by going straight to how people most naturally reflect and communicate their emotions: the face.”

For 16 years now, they’ve been both the pioneer and the most careful commercial  practitioner of applying facial coding as a research tool to help clients lower risks and optimize marketing, products and other business solutions. Facial coding enables them to scientifically yet non-invasively capture, quantify and analyze the emotions shown.

Another great way to make the best decisions would be to use exclusively the assessment systems in order to narrow down the number of possible candidates to only a few before you involve any human judgment. Afterwards, you can make the final decision by consulting with the HR managers that you trust the most.

Great People Inside provides easy-to-use tools and processes to attract, assess, match, select, onboard, manage, develop, benchmark and maintain workforces anywhere in the world.

Finding the right talent, the best fit for the job and your organisation, can be a very challenging task. It requires deep knowledge of your own organisation’s culture and keen understanding of the candidate’s personality, strengths, interests, work style and other characteristics. Our technology and solutions will do the work for you, helping you find employees who can flourish and reach the highest performance required to constantly bring your company forward.

Request a free demo:

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Sources:

Mlodinow, L., “Subliminal: How Your Unconscious Mind Rules Your Behavior”

www.wepow.com

www.forbes.com

www.sensorylogic.com/

 

Algorithm vs. Human Instinct

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Everyone wants to have the best people in the right positions. But how exactly can you accomplish this?

This is where HR steps in. Most people underestimate its importance, but studies have shown the great hidden impact that great HR can have on any organisation.

Watson Wyatt surveyed 405 publicly traded companies of all types, posing 72 wide-ranging questions on everything from training to workplace culture to communications. In order to come up with a so-called Human Capital Index (HCI) score for each company, a statistical formula was applied (HCI measures how well an organisation makes use of the ability of an individual to perform. A higher human capital index indicates better management of human capital by the organisation. It is measured on a scale of 100). Then the subject companies were sorted into three HCI-rating categories: low, medium, and high. The companies in the high-HCI group delivered a 103 percent total return to shareholders over a five-year period, compared to 53 percent for low-HCI and 88% for medium-HCI companies.

While psychometric testing and performance prediction have evolved considerably over the past 100 years, their value is often under appreciated. In this article from thepsychologist.bps.org.uk,  two critical lessons from this broad field of research are highlighted. Namely, research on performance prediction has taught us the importance of choosing the right people and using the right tools to do so.

As it is mentioned in the article, selecting the right candidates is an important goal, but we must not forget about the one with equal importance – screening out undesirable candidates. The consequences of choosing the wrong people can be extremely detrimental for the company, as they lead to increased turnover rates, higher recruitment costs, and training expenses, along with lost productivity and decreases in morale among all employees. The high costs associated with replacing poorly performing individuals make it all the more important to identify and select the best performers in the first place.

This is where you have to ask yourselves: on what should I base my decision when selecting a new candidate? Human instinct or a pre-employment assessment system? The thing is – people are very good at identifying what exactly it’s needed for a certain position in their company and at extracting information from the candidates, but they are doing poor at interpreting the results. The analysis made by Harvard Business Review (HBR) on 17 studies of applicant evaluations shows that a simple equation outperforms human decisions by at least 25%. This is valid for any situation with a large number of candidates – no matter if the job is on the front line, middle management, or in the C-suite.

There are also several other benefits to the company that an employment evaluation system can bring. It provides leaders with valuable information not only about their candidates, but also about their existing employees. This helps you identify their development needs and their strongest abilities, which you can improve, based on the given feedback.

This doesn’t mean that you should completely remove the human judgment from the equation.

A great way to make the best decisions would be to use exclusively the assessment systems in order to narrow down the number of possible candidates to only a few before you involve any human judgment. Afterwards, you can make the final decision by consulting with the managers that you trust the most.

In order for the assessments to be successful, there are certain rules that must be respected:

  • Understanding the importance of the assessment process and it’s role in identifying the performance levels can lead to the success or failure of the process
  • Respecting the methodology suggested and agreed upon by the company leads to maintaining the objectivity, regardless of who is being assessed
  • Encouraging employees to get involved in a permanent self assessment process and ask for feedback. This leads to self-motivation and engagement.
  • Follow up the assessment. The assessed employee and the assessor will meet for a follow up session to analyse and discuss results, certain situations and evaluate the potential solutions for the identified problems, which leads to mid-term and long-term development.

 If you need more information about how the assessment system works, get in touch with a consultant now!

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