When the demand for outstanding talent outstrips the supply, you must break away from traditional HR constraints that inadvertently put a lid on the quality of the people seen and hired. (FYI, we discuss these controversial ideas at our monthly Hire with Your Head book club meetings. Please join us.)

I had a chance to demonstrate this point-of-view during a recent call when a CHRO from a global enterprise reached out. She had seen this graphic showing the before and after impact of Performance-based Hiring and wondered how it was developed and what was the research behind it. She wanted to learn more when she found out that it was based on over one thousand different hiring projects ranging from camp counselors and high-volume call center roles to hundreds of different sales, engineering and management positions.

Performancebasedhiring.com

What unfolded was a series of discussions that described how Performance-based Hiring was developed, who it was developed for and why it’s so effective for attracting, assessing and hiring people who everyone else wants to hire, too.

Define Success, Not Skills

At the heart of Performance-Based Hiring is a deep understanding of employee engagement, as underscored by Gallup’s Q12 research and encapsulated in their seminal work, “First Break All of the Rules: What the World’s Best Managers Do Differently.” This approach champions the critical need to clarify real job needs as part of the employee development process. Performance-based Hiring takes this one step further and defines these factors during the job requisition process, long before anyone is seen or hired, ensuring candidates are fully engaged from the get-go. The notion of measuring employee engagement pre-hire, rather than post-hire, represents a paradigm shift in identifying and understanding real job needs before it’s too late. In fact, I contend the failure to connect these two dots is why the workforce around the world continues to be so disengaged.

The foundation of Performance-based Hiring is built on Stephen Covey’s “Seven Habits of Highly Effective People,” especially the habit of beginning with the end in mind. In fact, our end is called Win-Win Hiring, meaning hiring success is measured on the 1st year anniversary date, not the start date. Achieving this outcome starts by defining success over the first year as a series of 6-8 key performance objectives (KPOs) replacing the traditional skills- and experience-laden job descriptions. This approach also accommodates the shift to skills-based hiring by asking hiring managers to describe how these skills are actually used on the job.

Our new ChatBot streamlines the creation of these performance-based job descriptions and the associated performance-based interviewing questions. At the core of this is asking candidates to provide detailed examples of major accomplishment most comparable to the critical KPOs and peeling the onion using behavioral fact-finding.

Ken Blanchard’s Situational Leadership model highlights another cornerstone of Performance-Based Hiring: the alignment of hiring manager and employee coaching styles as a key driver of success. Without this a Win-Win Hiring outcome is unlikely. The Performance-Based Hiring Quality of Hire Talent Scorecard is a tool that captures this alignment, recognizing that a mismatch in styles can lead to instant failure. This is shown graphically below highlighting the requirement that both the hiring manager’s and new hire’s styles and needs must match.

The Quality of Hire Talent Scorecard – Performancebasedhiring.com

Todd Rose’s “The End of Average” delves into the importance of intrinsic motivation; a key factor Performance-Based Hiring evaluates at every interview step. Todd and I worked together when his book was written discussing the importance of context as the key to driving success. From a hiring standpoint it’s important to note that a candidate’s motivation to get the job does not equate to their motivation to excel in the role, a distinction that can significantly affect both performance and satisfaction.

John Doerr’s “Measure What Matters” further supports the idea that the use of Objectives and Key Results (OKRs) in performance and project management is essential for individual and team success. These are comparable to the KPOs mentioned earlier and has always been a core component of Performance-Based Hiring.

It turns out that unless work is defined as a series of performance objectives it is not possible to attract, assess and recruit top tier talent and achieve consistent Win-Win Hiring outcomes. A key part of this is asking candidates to compare all of their job opportunities – including a counteroffer and before an offer is made – on all of the factors that drive long-term career success, not just the size of the start date package. As shown in the graphic below, this is the key to closing more offers and ensuring the likelihood of Win-Win Hiring outcome.

From a legal standpoint, Performance-Based Hiring stands on even firmer ground. Littler – a leading labor law firm – prepared a comprehensive whitepaper stating that this methodology not only meets all U.S. legal standards but also enhances talent attraction and assessment, opening doors to a more diverse and high-potential talent pool by focusing on performance objectives rather than traditional qualifications.

Talent Strategy Must Drive Tactics, Not the Other Way Around

During our discussion I made the point that the use of assessment and psychometric tests could be detrimental in markets where the demand for skilled candidates outpaces supply. The problem with such tests, while valid in certain contexts, may deter top talent from pursuing opportunities, highlighting a classic case of suboptimization. Performance-Based Hiring, by contrast, avoids this pitfall by balancing the long-term interests of both candidates and hiring managers and introduces these tests much later in the process.

As mentioned above, when talent is scarce and the demand is high, the needs of candidates must take precedence over the company’s. This perspective often overlooked in traditional hiring processes, is crucial for designing hiring programs that not only attract but also retain top talent. Since Performance-based Hiring was designed with this perspective in mind from it’s very beginning it makes it unique in the world of hiring when raising the talent bar is the ultimate objective.

Bottomline, Performance-Based Hiring is not just a methodology; it’s a strategic framework that integrates proven principles from leading thinkers and research, offering a holistic approach to talent acquisition. As companies worldwide strive to navigate the complexities of the modern talent landscape, Performance-Based Hiring stands out as a beacon of innovation, ensuring that the right talent is not only discovered but also deeply engaged and retained.