the bottom line benefits of employees who ‘fit’ jonathan canger, ph.d. tmp worldwide/monster...
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The Bottom Line BenefitsThe Bottom Line BenefitsOf Employees Who ‘Fit’Of Employees Who ‘Fit’
Jonathan Canger, Ph.D.Jonathan Canger, Ph.D.TMP Worldwide/MonsterTMP Worldwide/Monster
HUGO Assessment GroupHUGO Assessment Group
The USF HR ROI ConferenceJanuary 17, 2003
Tampa, FL
AgendaAgenda
The Big PictureModel – The Roles of H RPerson-Organization FitProcesses for Selecting For FitWhere Does Selecting For Fit Fit?Estimates Of ROI Vs. RealityWhat Else?
The Big Picture (Pfeffer, 1994)The Big Picture (Pfeffer, 1994)
In 1972, How Would You Predict The 5 US Companies With The Largest 20-Year Return?
(1972-1992)
The Big Picture (Pfeiffer, 1994)The Big Picture (Pfeiffer, 1994)
Conventional Wisdom Says:(a la Michael Porter, Competitive Advantage)
1. Pick The Right Industries • Barriers To Entry• Substitute Products/Services• Power of Suppliers• Power of Buyers• Rivalry Amongst Existing Players
2. Pick Companies With Dominant Market Share
And The Winners Were….And The Winners Were….
1. Southwest Airlines (21,000%)2. Wal-Mart (19,800%)3. Tyson Foods (18,100%)4. Circuit City (16,400%)5. Plenum Publishing (15,700%)
None of Which Would Have Made Porter’s List
““The point here is not to throw out The point here is not to throw out conventional strategic analysis … but simply to conventional strategic analysis … but simply to note that the source of competitive advantage note that the source of competitive advantage has always shifted over time. has always shifted over time.
What these five firms have in common is What these five firms have in common is that for their sustained advantage, that for their sustained advantage, they rely they rely not on technology, patents, or strategic not on technology, patents, or strategic position, but on how they manage their position, but on how they manage their workforceworkforce..
Jeffrey Pfeffer, Jeffrey Pfeffer, Competitive Advantage Through Competitive Advantage Through PeoplePeople, Harvard Business School Press, 1994, Harvard Business School Press, 1994
Human Resource RolesHuman Resource RolesA ModelA Model
Future/Strategic Focus
Day-To-Day/Operational Focus
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
2. “Employee Champion”
Managing Employees’Contribution
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
3. “Change Agent”
Managing Transformation And
Change
2. “Employee Champion”
Managing Employees’Contribution
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
4. “Strategic Partner”
Aligning HR andBusiness Strategy
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
3. “Change Agent”
Managing Transformation And
Change
2. “Employee Champion”
Managing Employees’Contribution
Where Do You Focus?Where Do You Focus?
• Where are you expected to focus?• Where can you do the best job?• What does the organization need?• Where can you have the biggest
impact?• What’s your history with the roles?
Sample Results – HR Roles Survey Sample Results – HR Roles Survey
Highest Rated ItemsHighest Rated Items (3.7 or Above)(3.7 or Above) WHAT HR IS DOING• HR participates in delivering HR processes (3.89)• HR spends much of its time listening and responding to employees’
issues (3.89)• HR helps this organization take care of employees’
personal needs (3.70)
HR SHOULD BE MEASURED BY• its ability to efficiently deliver HR processes (4.3)• its ability to help the organization anticipate and adapt to future
issues (4.22)• its ability to help meet employee needs (4.03)• its ability to help make strategy happen (3.84)
Sample Results – HR Roles Survey Sample Results – HR Roles Survey
Lowest Rated ItemsLowest Rated Items (Below 3.1)(Below 3.1) WHAT HR IS( NOT) DOING HR spends much of its time on strategic and business issues (2.69) HR participates in the process of defining this organization’s
business strategies (2.70) HR is seen as a change agent (2.73) HR help this organization improve operating efficiency (2.95) HR helps this organization adapt to change (3.03) HR spends much of its time supporting new behaviors to keep the
organization competitive (3.03)
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
4. “Strategic Partner”
Aligning HR andBusiness Strategy
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
3. “Change Agent”
Managing Transformation And
Change
2. “Employee Champion”
Managing Employees’Contribution
IsSB
Focus On Selection /Focus On Selection /Talent AcquisitionTalent Acquisition
• Sets The Upper Limit On Organizational Performance
• Can’t Develop Everyone For Everything• Turnover Is A Certainty• War For Talent Will Rise Again
Rethinking SelectionRethinking Selection
Traditionally, organizations have selected employees based on applicants’ KSAs and job requirements.
This has led to a focus on:– Cognitive ability– Specific knowledge and skills relevant for a
particular job
Rethinking SelectionRethinking Selection
In addition to predicting performance in a specific job, new goals include predicting:– Satisfaction (Judge et al. 2001 meta-analysis: r
between job satisfaction and job performance is .30; 52 for complex jobs!)
– Tenure– Contextual / Citizenship performance– Effectiveness in teams– Effectiveness in diverse jobs
Do You Want To Be An Do You Want To Be An Employer Of Choice?Employer Of Choice?
Do You Want To Be An Do You Want To Be An Employer Of Choice?Employer Of Choice?
Can You Afford To Be AnCan You Afford To Be An Employer Of Choice? Employer Of Choice?
Person-Organization FitPerson-Organization Fit
Definition: Person-Organization (P-O) fit is the congruence of an individual’s personality, beliefs, and values with the culture, norms, and values of an organization
Why Worry About Fit?Why Worry About Fit?
Jennifer Chatman (1991) showed that assessing the congruence between a candidate’s values and the prevailing values of the organization predicted:– Job satisfaction 1 year later– Intent to stay with organization 1 year later– Actual turnover 2.5 years later
Preferences & Values
Experience& Skills
Knowledge& Abilities
Personality& Work Style
“ Can Do ”“ Could Do ”
“ Prefers To ”“ Tends To ”
P-O Fit Involves the ‘Soft Underbelly’
How Do You Do The How Do You Do The Matching?Matching?
• Successful Person Profiling – Find candidates who are similar to the people who fit well in the organization now, in terms of their personality and values
• Organization Culture Profiling – Assess the current culture or prevailing values and find candidates who would like that environment.
Example1 – Personality Profiling --Candidate Example1 – Personality Profiling --Candidate vs. Successful, ‘Good Fit’ Incumbentvs. Successful, ‘Good Fit’ Incumbent
.
Conscientiousness
Emotional Stability
Openness
Extraversion
Agreeableness
Example2 – Candidate Organization Preferences vs. Example2 – Candidate Organization Preferences vs. “As Is” Organization“As Is” Organization
.
Preferences & Values
Experience& Skills
Knowledge& Abilities
Personality& Work Style
OrganizationPractices& Values
Experience& Skill Requirements
Knowledge& Ability Requirements
Behavioral &Work StyleRequirements
Candidate Organization
Example2 – Candidate Organization Preferences Example2 – Candidate Organization Preferences Vs. “As Is” OrganizationVs. “As Is” Organization
.
Newcomer Integration
Mgt–Employee Relations
Continuous Learning
Information Exchange
Casual Atmosphere
Profit Orientation
Individ. Expressiveness
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
4. “Strategic Partner”
Aligning HR andBusiness Strategy
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
3. “Change Agent”
Managing Transformation And
Change
2. “Employee Champion”
Managing Employees’Contribution
Where Does Selecting For Fit Where Does Selecting For Fit Fall in The Model?Fall in The Model?
Future/Strategic Focus
Day-To-Day/Operational Focus
PeopleProcess
4. “Strategic Partner”
Aligning HR andBusiness Strategy
1. “AdministrativeExpert”
Managing The Firm’s HR Infrastructure
3. “Change Agent”
Managing Transformation And
Change
2. “Employee Champion”
Managing Employees’Contribution
Assessing ROI For SelectionAssessing ROI For Selection
• Been Around For A While (Taylor-Russell Tables - 1930s)
• Tables Already Built That Predict The Average Increase In Performance Expected, Per Cent Increase in Satisfactory or Superior Workers, etc.
• Also Have Formulas To Predict Dollar Utility of Selection Procedures (Brogden, 1948; Cronbach-Glesser, 1965)
Effect Of Validity Effect Of Validity On % Satisfactory WorkersOn % Satisfactory Workers
Per Cent Satisfactory with No Test
(50% Hired)
Per Cent Satisfactory
Employees
Per Cent Improvement in Satisfactory EE’s
No Test 50% 0
Test with r =.3 60% 20
Test with r =.6 70% 40
Test with r =.8 80% 60
Effect Of Quality of Candidates Effect Of Quality of Candidates On Test Impact On Test Impact
Per Cent Satisfactory with No Test
(50% Hired)
Per Cent Satisfactory
Employees When Test with r =.5 used
Per Cent Improvement in Satisfactory EE’s
10 17 70
30 44 46.7
50 67 34
70 84 20
90 97 7.8
100 100 0
Effect Of Per Cent Of Candidates Effect Of Per Cent Of Candidates Hired (Selection Ratio) Hired (Selection Ratio)
Selection Ratio Per Cent Satisfactory
Employees When Test with r =.5 used
Per Cent Improvement in Satisfactory EE’s
100% 50 0
80% 57 14
50% 67 34
20% 78 56
Why Don’t We Use Utility / Why Don’t We Use Utility / ROI Analyses More?ROI Analyses More?
• Not Familiar With The Models• Need To Collect Data• Complexity (Formulas / Number of Variables)• Frequently Yield Unrealistic Results• Managers Aren’t Swayed By Them
So What’s The Bottom Line?So What’s The Bottom Line?10 Suggestions10 Suggestions
1. Keep The HR Roles Model In Mind; Try To Impact As Many Quadrants As You Can; Prioritize
2. Use Technology To Enhance Your Below-The-Line Quadrants (or consider outsourcing)
3. Use Multiple Metrics, and Involve Decision Makers In The Design Of Any Metrics (Execs, Finance, Ee’s)
4. Align With Company Strategy And Objectives And Look At Larger, Organization Wide Outcome Performance Data, even If ‘Contaminated’
5. Use Concurrent Validation Studies – “If we implement this procedure, we’d have 10 more Marys and 10 less Bobs”
So What’s The Bottom Line?So What’s The Bottom Line?10 Suggestions10 Suggestions
6. Consider ‘Fit’ Initiative – Become an Employer of Choice for The People That Fit, not for everyone.
7. Learn The Business and What Competitors are doing, and tell Management
8. Distribute The Watson-Wyatt Study, along with your summary, to your executives
9. Build Your Own Version of Watson-Wyatt Study – What predicts Tenure & commitment in Your Organization? – and combine with EOS
10. Partner With Finance, but Learn From Sales & Marketing
The Bottom Line BenefitsThe Bottom Line BenefitsOf Employees Who ‘Fit’Of Employees Who ‘Fit’
Jonathan Canger, Ph.D.Jonathan Canger, Ph.D.TMP Worldwide/MonsterTMP Worldwide/Monster
HUGO Assessment GroupHUGO Assessment Group
The USF HR ROI ConferenceJanuary 17, 2003
Tampa, FL
