Quality of hire is a crucial metric for organizations as it directly impacts overall performance, employee retention, and business outcomes. However, companies often struggle to agree on how to measure it due to the multifaceted nature of job performance and the subjective elements involved in traditional evaluation methods.

To me, it’s pretty simple: just ask if the person is achieving their individual and team performance objectives on some 1-100 scale and then look at all of the skills, behaviors and competencies that impact the person’s performance to see if the interview predictions were correct or not. This idea is shown in the Quality of Hire Talent Scorecardsample shown below.

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Quality of Hire Talent Scorecard Sample Results

If you’ve defined the key performance objectives (KPOs) during the intake meeting, you can then compare the predicted performance to the person’s actual performance and more accurately figure out why you were off target. The problem that most companies have is ignoring the importance of defining the work as a series of performance objectives when the requisition was first opened. This is why Quality of Hire becomes difficult to measure post hire since there’s no benchmark for comparison.

The Hiring Formula for Success Drives Motivation

This is not a problem using Performance-based Hiring since it starts by developing the list of KPOs during the intake meeting. Then when determining the value of each factor in the scorecard it helps to use the “Hiring Formula for Success” to see the relationships between them and how they impact motivation and overall performance. Without this situational context it’s hard to make an accurate prediction and why most predictions of performance miss the mark.

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In Hire with Your Head (Wiley, 4th ed, 2021) I tell a story about a CEO who asked me how I could accurately predict a person’s ability, performance and potential during the interview with just one question. With the Hiring Formula for Success in the back of my mind, I said this:

By defining what success looks like pre-hire, you’ll be to more accurately predict it post-hire.

He then asked me how to do this for a VP Marketing position he was trying to fill. I just asked him, “What does the person in this role need to accomplish over the next 1-2 years that would ensure your company can meet the business growth plans you committed to your VCs?” He instantly got the picture and rather than using 10-15 years of experience in a similar industry, an MBA and technical degree from a top school and a results-oriented attitude, we developed a series of key performance objectives (KPOs) that described job success. The first one related to building an organization that could ensure the company was able to grow 3X in 3 years. The rest covered issues related to ensuring this could happen.

The one question, aka “The Most Important Interview Question of All Time,” involves asking a candidate for examples of major accomplishments most comparable to each of the KPOs. Then use the Hiring Formula for Success as a guide for fact-finding and collecting evidence for each factor. For example, as part of understanding each accomplishment ask what technical skills were used, how the person worked with others, how roadblocks were overcome and when the person went the extra mile.

By assigning other interviewers some of these accomplishment questions you’ll then have enough evidence to accurately predict Quality of Hire when shared as part of a formal debriefing session. During this meeting be sure to focus on “n” since this is weighted more than all of the factors and the Trend of Performance over time since this indicates potential. This Sherlock Holmes interviewing techniquewill help in gathering the evidence needed to assess the other factors.

The Importance of “n” in the Hiring Formula

The exponent “n” in the Hiring Formula for Success is critical because it amplifies the role of motivation in achieving results. Even if a candidate possesses all the necessary skills and seems to fit well within the company, their performance can fall short if their motivation is not accurately assessed and aligned with the job’s demands. This is a critical factor that’s often overlooked during the hiring process yet it’s the most important driver of performance and measuring Quality of Hire.

Using Performance-based Hiring to Measure and Improve Quality of Hire

By integrating the Hiring Formula for Successand using Performance-based Interviews and the Talent Scorecard, organizations can significantly enhance their ability to predict and improve Quality of Hire. The focus on intrinsic motivation (“n”) and continuous performance tracking ensures that new hires are not only capable and a good fit but are also highly motivated to excel in their roles. This comprehensive approach leads to consistent and exceptional hiring outcomes, ultimately driving organizational success.

It turns out this if a company wants to raise its talent bar, it first must measure where it is now. This is where Performance-based Hiring can help get you started.

In Part 2 on measuring quality of hire we’ll describe how to quantify improvements in quality of hire in financial terms. This is why “Thinking Like a CFO” will become an HR leader’s super skill.