The Myth of the Rational Hire

Ten years ago, Bryan Caplan wrote The Myth of the Rational Voter: Why Democracies Choose Bad Policies, a title that echoes the executive hiring process.

Obviously, the best person should be hired to fill every open job. It’s best for the hiring company and fair for the applicants.

Caplan argues in his book, however, that voters are irrational in the political sphere and have systematically biased ideas regarding economics. These biases drive decisions, often poor ones, when it comes to either voting for candidates or hiring for executive jobs.

Companies have procedures in place that ensure the hiring of someone with the perfect background, according to the job specifications. Sadly, these processes often result in a sensible but uninspired hire.

There are many reasons the best candidates may not be hired:

• The HR team does not have specific functional knowledge.
• Hiring managers ignore cultural fit.
• Job specifications are a laundry list without focus.
• Inexperienced interviewers don’t examine deeply enough.
• The immediate bosses are in a rush to fill the position.
• An easy-to-justify hire removes much of the culpability should the hire not work out.

There is a long list of credible reasons for making poor decisions, but I believe there is one reason that drives many bad hiring choices:

Relying on signals is the No. 1 reason for poor hires.

It can be difficult to determine true competency. It’s easier to check off signals of success from a job spec list. Hiring decisions are being made based on which candidate has the most positive signals based on the company’s inclinations. For example:

• Ivy league college versus state school
• Master’s degree versus bachelor’s degree
• Business major versus liberal arts major
• Well-known previous company versus unknown business
• Same industry versus outsider
• Same job versus comparable skills
• Horizontal move versus qualified for a promotion

These signs can be positive career signals, but I believe they only provide a weak valuation of future success — especially at a new company with a different culture.

How to Make Rational Hires

My recommended plan for making rational hires includes:

1. Behavioral interviews
2. Searching for and documenting relevant human capital (i.e., skills, knowledge and habits)
3. HR as a coordinator and valued contributor but not a decision-maker
4. A single decision-maker who has the most to gain (or lose) based on the hire’s success, who spends two hours or more getting to know the candidate and makes any job offer
5. Four to six additional interviewers from the same team including peers, potential reports and important partners to provide their assessment on key factors, such as:

• Attitude/cultural fit
• Desire for the job
• Dedication to the function
• Directly relevant knowledge for the job
• Ability to teach
• Ability to adapt
• Ability to lead
• Ability to team with others
• Ingrained habits that will impact job performance

Each interviewer would be required to justify any specific assessment and provide an overall recommendation to the decision-maker.

The best signals are those that prove altitude, attitude and aptitude directly related to the necessary skills, teamwork and leadership for the job.

About the Author | Richard Sellers

Richard is Chairman Emeritus of the Marketing Executives Networking Group (MENG), founder of the Demand Marketing consulting firm, and former Sr. VP of Marketing for three multi-billion dollar companies: CEC, WLP, and Service Merchandise. His early career was at GE, P&G, Playtex, and the Marketing Corporation of America.