People like to believe they are rational, even when the exact opposite case is true. Study after study by scientists Daniel Kahneman and Amos Tversky have identified three major sources of human error that operate whether we know it or not:
- We tend to evaluate people using mental stereotypes.
- Highly vivid, frequent, or recent data heavily influences decisions.
- "Anchoring" tends to affect decisions.
Stereotyping in our world occurs when we base decisions on how well the applicant or employee fits our stereotype of the job. For example:
- We tend to select employees who "look like" current employees (the applicant looks and talks like a banker, salesperson, analyst, engineer, etc.).
- We tend to think some people (women, minorities) don't have the temperament to be executives, so we don't promote them.
- We think applicants can be selected by matching their scores against high-producer averages.
- Managers are afflicted with a "know 'em when they see 'em" syndrome.
- HR interviewers want to "get to know" an applicant.
Frequent or Vivid Data
Another source of hiring mistakes is using frequently experienced, particularly vivid, or the most recent types of data to make decisions instead of the most relevant data. For example:
- Top producers' skills are assumed to make them good managers.
- Likable, good looking, or tall people are preferred over others, simply because they stand out in our impressions.
- When a well-known company loses a bazillion dollars in an EEOC challenge, we suddenly focus on the need to defend ourselves against lawsuits.
The last area to affect decision making is "anchoring." Anchoring means that we evaluate new data using an arbitrary anchoring point. For example:
- We are reluctant to spend $50 on tests to hire employees who earn less than $30,000, but will spend $5,000 or more to hire people who earn above the magic number, say $100,000.
- We assume applicants who score 90 on a test should outperform applicants who score 80.
Experience Trumps Facts
These are more than interesting facts. In essence, they are evidence that people have a persistent tendency to ignore objective facts in favor of subjective experience, personal opinion, or logical illusion.
So what implications does this tendency have for recruiting and HR? Plenty! It means that a disproportionate number of unqualified people are hired and promoted to the wrong positions. The cost? An average of 30% to 50% of payroll annually.
There are many observable symptoms of human errors in most corporations:
- Gut reactions outweigh facts. (stereotyping)
- Interviewers want to "get to know" applicants. (stereotyping)
- Favorite tests persist, with no evidence of whether they work or not. (frequent or vivid data)
- Management is reluctant to spend money to hire low-level positions. (anchoring)
- Hiring tests tend to "migrate" from training workshops. (frequent or vivid data)
- Interviews persist, despite the fact they are only accurate half of the time. (frequent or vivid data)
- People scoring a 90 are perceived as "better" than people scoring 80 (frequent or vivid data)
- Certain types of applicants do (or do not) work out in certain positions. (stereotyping)
I'm sure you can add more to this list; the important thing to remember is that people tend to do nothing with factual knowledge, or even treat it with suspicion. Basically, people tend to make decisions based on data they only think exists!
The solution for dealing with these errors requires another psychological strategy: "cognitive dissonance." This is the term given to a condition where a person is presented with two totally conflicting beliefs.
For example, suppose we all believe we are the only sentient (i.e., self aware) beings in the universe — that is, until a dedicated researcher discovers vast colonies of teeny-tiny people living comfortably in belly-button lint (and you always wondered where the voices in your head were coming from!). Now we have to make a decision, we either accept the existence of belly-button people or not. In effect, the brain goes "tilt!" and one belief or the other needs to be rejected, because two totally conflicting beliefs cannot occupy our brain at the same time. That is cognitive dissonance (and belly-button people) at work.
Here are a few strategies you might consider using to defeat human errors associated with hiring:
- Don't argue, it will only encourage the person to defend his or her beliefs.
- Use analogies to make the point, such as pro- sports tryouts, talent scouts, coaches, and playing conditions.
- Get people to publicly agree that there are performance differences among employees.
- Get people to admit that every applicant looked like a high performer during the pre-hire phase. ("What were we thinking?!")
- Conduct a brainstorming session to put a cost on low performance and a benefit on high performance.
- Gather performance data (i.e., turnover, training, retention, sales, productivity, work attitude, and so forth) and statistically compare it to pre-hire test scores.
- Stay informed and distribute the latest EEOC litigation and settlements.
Even the smartest managers, recruiters, and HR people seldom recognize the tendency to make judgment errors unless they are presented with data that creates cognitive dissonance. Unfortunately, it's just human nature. The worst-case scenario is a manager's in-your-face awareness that he or she is personally losing the organization millions from low performance.
When presented with this type of data, entrepreneurial change agents don't have to wait for opportunities, they can make their own.
Of course, everybody else can just continue believing interviews accurately predict performance, unvalidated tests are appropriate for hiring, variable employee performance is the norm, training can fix hiring mistakes, or sourcing is the biggest recruiting problem.
We all have a choice.