THE ART AND SCIENCE OF HIRING SENIOR LEADERSHIP
Hiring for management roles has traditionally been an area of greatest disconnect among staffers in Human Resource. While resumes & reference checks have long been and still are the most widely used methods for screening candidates at managerial levels, various research studies have shown it to be a highly unreliable way of selection. Besides being an incredibly time taking process, reference checks are often carried out insincerely and thus, lack credibility. A validity meta-analysis study conducted by Aamodt & Williams in 2005 found that the corrected validity coefficient for reference recommendations and actual job performance was a staggeringly low .29. Moreover, the cost of a bad hire is something too difficult for companies to accommodate at all times. A bad hire costs a U.S. company roughly 30 percent of the employee’s first-year potential earnings, the U.S. Department of Labor estimates.
As a result, more and more organizations have started adopting personality or some form of emotional intelligence tests that can reveal much finer traits about the candidate than what can be mined through background checks. And although personality tests can be really insightful — provided they’re the right kind — they have their own limitations and shortcomings in terms of giving an all-round picture of the candidate’s capabilities on the job as personality alone cannot predict job success.
In that case, what are the right measures that one can employ to screen candidates for mid-senior management positions? HR practitioners argue that in order to accurately estimate the person’s on-job potential at the screening stage, there’s a need for a tool that can mimic the interview process and evaluate how a candidate approaches real workplace problems.
This is where Situational Judgment tests (SJTs) come in. SJTs are MCQ based tests which present the candidate with real-life scenarios that one is expected to face on the job and evaluate their response(s) to it, thereby assessing their intelligence, aptitude, and work experience. SJTs adopt a competency based approach to managerial evaluations which means that the questions are built around competencies that one is required to possess in order to do the job. Validity studies have shown that SJTs when used in combination with personality tests show an incremental correlation of 0.2–0.4 beyond the personality test correlation factor.
Continuing with its mission to craft credible and intelligent assessment tools, Research and Development cell at Aspiring Minds developed situation judgment tests for mid-management &senior-management hiring.
The SJT for mid-management hiring named AM Direct tests the candidate on competencies like people management, planning & organizing, problem solving, commercial savvyness and client management. The test iscurrently being used by some of the leading consulting, IT & FMCG firms to hire for mid-managerial positions. The test is suitable to be used for professionals with an experience of 4–8 years in the industry and expected to handle a work team and clients.
The situational judgment test for senior-managers, AM Lead, is built around the following set of competencies, critical for any leadership role:
- Strategic Thinking & Planning
- Problem Solving & Decision Making
- Business Acumen
- Project Execution
- Influencing Skills
Similar to AM Direct, the test asks the candidate to choose the most appropriate & the least appropriate response to a given business situation. The test has been validated across various sectors for a variety of roles that typically employ people with 8–12 years of work experience.
A validation study was done on a group of AVP level employees across divisions at a leading IT services company to evaluate candidates on competencies required for their job. The objective was to validate the effectiveness of AM Lead on incumbent employees and set assessment benchmark for the company to use it to hire potential AVPs. The SJT showed a strong correlation of 0.36 with existing performance data of company personnel thereby validating its effectiveness. In addition to that, it also demonstrated a reduction in false hires at the company by as much as 30%.Today, AM Lead is used by a number of organizations globally to recruit for their senior management roles, and also as an aid in designing their leadership development programs.
It has now become imperative for the HRs to take a step back and rethink the hiring strategy which has long remained subjective & unreliable. It can be alleviated with the use of quality, well-validated, predictive assessment tools which can enable the business to hire truly potent managers who will become the future leaders of the company.
Originally published at www.aspiringminds.com.