Company board selection

Memory Nguwi

Despite the mounting scientific evidence that some employee selection methods have a weak or no predictive power, some companies still continue to use them. No wonder why such companies continue to struggle. When you use selection methods with high predictive power you are likely to outperform your competitors and experience high productivity.

If you are struggling as a business, before you blame the environment and others for your misfortunes, check on how you bring new employees into your organisation. If there is no science in how the employees are selected you will never win. Any win you may have or have had could be down to pure luck. It is important that the select team of board members be involved in the selection of senior executives. This should not be limited to the HR committee members alone. For different roles involve different teams from the board. Here are the top seven problems and suggested remedies.

Poorly structured selection process – The first challenge in the recruitment and selection of executives and other employees is that the process is often done in reverse. The correct process is that once candidates have been selected on the basis of the initial recruitment criteria notably qualification and experience you need to assess the candidates through psychometric tests and assessment centres first before going for the interviews. In practice, most companies start with interviews and then shortlist a few people for psychometric tests. The problem with this process is that the interview method as a selection process is unreliable, especially if the interview is unstructured. The results are that you end up with a candidate who will fail to perform to the required standard.

Interviews can be faked. I am surprised at the level of trust board members place on the interview alone as a selection method. Considering that the interview method is unreliable, why are board members so excited about this selection method?

The illusion of the portability of talent- There is a general illusion that talent and performance are transferable from one organisation to the other. At a higher level, it is even more risky to assume that because an individual succeeded in one organisation they will carry success to your organisation. As a result of this erroneous assumption, good candidates with the right cognitive ability level and critical thinking skills are rejected on the basis that they do not have the experience in a specific industry. At a higher level, your technical skills are less important. What matters most at this level is the ability of the candidate to mobilise resources and employees to rally around a compelling vision for the organisation. Highly technical people tend to lack the people skills needed to lead at a higher level. I have also noted that engineering companies tend to prefer engineers to be CEOs, if not they would rather get an accountant. It is a big mistake to go this route. Open the top post to all fields. What is required is their level of cognitive ability and their people skills and not what they studied.

Do not involve executives in some of the selection – If you allow your executives too much power to select other executives there are two things that are likely to happen. If they are loyalty driven, they are likely to bring people they have worked with before which always does not work. It breeds groupthink. The same individuals will not question when the CEO makes the wrong decisions. You need a team with diverse views, who can challenge the CEO professionally. If you are lucky they may be a formidable team, but it is very rare.

Here are the juicy facts about various selection methods:

a. When selecting employees with no prior experience e.g. trainees and other entry-level jobs the top predictor of job performance is the general mental ability (i.e. intelligence or general cognitive ability). This can be assessed through properly validated psychometric tests administered by registered psychologists. If you add other measures such as integrity and personality tests (conscientiousness), structured interviews the predictive power goes up significantly.

b. Holding other things constant, here are the predictive powers of each of the common selection criteria used by organisations: general mental ability (intelligence/cognitive ability) explains 44%, integrity tests explain 21%, structured interviews (these are standardised interviews) explain 34%, personality tests — conscientiousness explains 5%, reference checks explain 7%, biographical data explains 12%, job experience 6%, situational judgment tests explain 7%, assessment centres explain 13%, years of education explain 1%, ability-based emotional intelligence explains 5%, personality-based emotional intelligence explain 3%, work sample tests explain 11%, job knowledge test explain 23% and age explains 0% of the variation in performance.(source: Validity and utility of section methods in personnel psychology: Practical and theoretical implications of 100 years of research findings — Schmidt et al 2016).

Just check how educational level (measured by the number of years of education), experience and age (although illegal to use age as a criterion) have such low predictive power. Why then are organisations using these methods against ample scientific evidence indicating otherwise?

Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and HR consulting firm. — https://www.linkedin.com/in/memorynguwi/, 481 946/290 0276 or mobile 0772 356 361, e-mail: mnguwi@ipcconsultants.com or visit www.ipcconsultants.com

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