Getting the People Equation Right: How to Get the Right People in the Right Jobs and Keep Them

By Logan Loomis

People are not your greatest asset. The right people, in the right jobs, effectively led are your greatest asset. 

Every leader today has the heightened challenge of getting the right people in the right jobs. You will not be equal to that challenge if you follow the traditional approach for malcing a hiring decision; that

• Language: English
• Publisher: Penn & Season Press
• Release date: Sep 11, 2022
• ISBN: 9798985467512

Book preview

INTRODUCTION

The ability to make good decisions regarding people represents one of the last reliable sources of competitive advantage since very few organizations are very good at it.

PETER DRUCKER

I was having dinner with Tom, the CEO of an IT firm for whom I was consulting. The diffused lighting in the restaurant, meant to enhance the ambiance, was only contributing to our somber mood. Tom said, He’s just not working out. Tom was talking about Eric, the head of a critical business practice area who was now eight months into the job. Eric was a vitally important hire for the IT firm—and he was failing.

We had done everything we knew to do in order to make a good hiring decision: highly regarded executive search firm, impressive resume, good story about his accomplishments, and good references—and Eric had been interviewed by Tom, the CFO, two members of the Board, and me. We all liked him. At the end of the interview process we concluded that Eric was a brilliant guy with great experience. It was clear to us that he had a lot of drive. We were right about his brilliance and drive; however, we all missed something. Something very important—how he related to his team.

To be fair, Tom confirmed that Eric was as brilliant and driven as we thought. He did have great ideas. But Tom quickly discovered that Eric alienated those who worked for him by being hyper-critical and authoritarian. Eric inherited a very talented team, but he managed without engaging the team in decisions. By not enrolling his people in decisions, he alienated them and diminished his authority, his influence, and ultimately his success.

We hadn’t picked up on that in the interview process.

During the interview process we concentrated on the results Eric had achieved, not how he had achieved them. We focused on his ideas for improvement and his apparent drive to succeed. The references we checked were with senior relationships. Eric apparently had managed up very well. But it was becoming clear to Tom that morale in the company was declining and that the company was at risk of losing some valued members of the team. Tom told Eric on several occasions that he was pushing too hard and needed to engage his people more. But, to Tom’s frustration, there was no change in Eric’s behavior. In the final analysis Tom concluded that Eric was just not going to make it in the job. He was let go.

If you manage people, you very likely have had similar dinners and parted ways with people you had initially thought, for very good reasons, would do a great job. You know the consequences— the significant cost—associated with a hiring mistake. The cost in money, time, productivity, and, most of all, emotional turmoil.

Certainly, no one wants to make hiring mistakes. But there I was talking with Tom about a big mistake. I had to admit to myself after that dinner that I did not have a clear-cut answer on how to consistently get the right person in the right job. I had practiced corporate law, worked through employment law issues, built executive and sales teams as a CEO in the natural gas industry, and been a business advisor to a broad range of companies—and I still did not really know how to consistently get the right person in the right job.

We all know that this is the goal. The hard part is getting there.

My dinner with Tom was definitely not the first time I had discussed people problems with a client. In fact, as I thought about it, I realized that I had spent an inordinate amount of time over the years with coworkers, clients, and colleagues discussing and working on people problems. It’s probably the same for you. I had legal training on how to handle firing someone, but none on how to avoid a bad hire in the first place. I wondered if there was a clear-cut way to consistently make better hiring decisions and thereby avoid many of the people problems we all deal with. In the years since my dinner with Tom, I’ve discovered that there is. I call it the People Equation.

My goal in working out the People Equation has been to create an analytical framework for making people decisions; one based on solid behavioral theory, application, and data. No one making a financial or marketing decision, for instance, would do so comfortably without analysis and data to support it. Most organizations, however, make decisions about talent far more subjectively than they would other business decisions, even though people costs often approach 60 percent of corporate variable costs.

Academics, such as John Boudreau, a professor of Management and Organization at the Marshall School of Business, University of California, and his publishing partner, Peter Ramstad, a chief Human Resources executive, have recognized the need for a shift in the role of Human Resources. They have written extensively about the need for HR to expand its service-oriented focus to become a decision science. ¹

A decision science is, by definition, a collection of qualitative and quantitative techniques used to inform decision-making. Although the academic dialogue has advocated that a shift is needed—that HR needs to be a decision science—that shift only started to emerge fairly recently. Laszlo Bock’s 2015 New York Times bestselling book, Work Rules!, brought the concept of HR as a decision science mainstream.

Laszlo Bock joined Google as SVP of People Operations in 2006. He then hired Prasad Setty to run the company’s analytics department. Setty is not what we typically think of as an HR leader; his degree is in chemical engineering. Setty has admitted that he had found the softer courses in his MBA curriculum frustrating because people decisions tend to invite emotional and subjective choices. So, he was well aligned with Bock in their mission that all people decisions at Google should be based on data and analytics—people analytics. Their goal, as is mine, was not to replace people in the process of making people decisions, but, rather, to arm the people with the information and approaches they need to make better decisions.

While companies are waking up to analytics and the power of data, Google has spent years building a performance-management engine. The Google HR function—called People Operations— starts every project with a question to answer. For instance, in response to a question regarding how to retain talent, Google developed an algorithm to proactively predict which employees are most likely to become a retention problem. This allows management to act before it’s too late. Every new hire for Google’s People Analytics department gets a laptop sticker that says, I have charts and graphs to back me up. So f*** off. This illustrates Google’s firm belief that insight from data-supported analytics regarding people can systematically improve people-related decisions.

People Analytics is now the broadly adopted term for the decision science regarding people-related decisions. People data and analytics is now one of the most in-demand skills for Human Resources managers—and I believe it should be for every hiring manager. Hence, this book. The Boston Consulting Group Global Human Capital Trends, 2015 report confirmed that people analytics was one of the most important human capital trends for organizations; a trend that continues today. The report substantiated that people analytics was on the agenda of almost every HR team surveyed in its survey of more than 3,300 business and HR leaders in 106 countries. The survey also confirmed that people analytics presented the second-biggest capability gap. Although 75 percent of the surveyed companies believed that using people analytics was important, only 8 percent believed their organizations had good capability in the area. The report observed that as companies struggle to build people analytics capability, the role of outside data is important in filling the gap. ²

My clients are primarily mid-market companies, and mid-market companies rarely have the Big Data resources of a Google. That said, for mid-market companies, the capability gap is even larger and outside data is even more important.

It is my hope that the People Equation will help fill the gap regarding the important question of how to get the right people in the right jobs—and keep them—by providing an analytical framework for making people decisions based on solid behavioral theory, application, and outside data. This is the People Equation:

Attitude (Suitability) + Qualifications (Eligibility) +

Culture Fit = Job Success

Eligibility refers to a person’s qualifications, the person’s education, training, skill, and experience; what we typically see in a resume. Suitability refers to a person’s attitude toward job activities and their resulting behavioral tendencies. When we look at culture fit, we are looking at congruent values. To get the People Equation right, you want people who have good eligibility and suitability for the job and who fit your culture. That’s a formula for success.

In Part 1 of the book we will look at how suitability, eligibility, and culture fit contribute to job success. In Chapter 3, we will look at a three-part analytical approach for getting the right person in the right job. The approach will put science behind how you interview and provide a litmus test for selecting predictive outside data.

Once you get the right people in the right jobs, the paramount issue is keeping them. That’s the focus of Part 2 of the book. The right talent can do the job well and will naturally be engaged with the job. The question is, do they want to do the job for you? The answer to that question distills down into the quality of leadership. In the first edition of this book, I framed managerial practices that support retaining talent. I have realized in the ensuing years since this book was first published that a practice starts with a commitment. So, in this second edition, I am framing five leadership commitments that support practices that help leaders retain and grow talent. The five commitments we will explore are:

Commitment to understanding.

Commitment to focusing on what is going well.

Commitment to expressing appreciation.

Commitment to safety.

Commitment to growth and development.

I have spent most of my adult life in New Orleans, and in Louisiana there is the practice of lagniappe—a little something extra. So, as lagniappe, I’ll add fun. It may not be as essential as the five commitments, but it is certainly important, because, as I’ll show in Chapter 11, not only does fun promote retention, it fosters trust.

If you are reading this book, you are likely making or supporting hiring decisions and, like me when I started defining the People Equation, have had very little or no training in how to make good hiring decisions. I am excited to help you fill that gap! So, let’s get started.

PART I

THE PEOPLE EQUATION

1

PEOPLE EQUATION ADDEND: ATTITUDE (SUITABILITY)

ELIGIBILITY refers to qualifications—skill, experience, and education—and tells us that a person can do a job. But to be truly successful in a job requires more. We need the intrinsic motivation to want to do the job. Suitability speaks to intrinsic motivation—to a person’s attitude toward the activities in a job as well as their attitude toward interpersonal relationships. Our attitude, by definition, is the way we think or feel about something and it is reflected in our behavior and our performance of job activities.

Whether consciously or unconsciously, we tend to factor our perception of a person’s attitude into determining if the person is suited for the job—and we should. For instance, Herb Kelleher, the late CEO and chairman of Southwest Airlines, once said that he started out looking for people with a good attitude.

Kelleher would actually hire people with less experience, less education, and less expertise—less eligibility—if they had a good attitude. Kelleher started Southwest Airlines against great odds. He described the response of the New York financial community to his venture as contemptuous. Nonetheless, he built the most consistently profitable airline in the industry. His success and leadership are legendary. Importantly, he viewed the key to his success as the ability to recruit and retain great people. ¹ So how did he do that? Kelleher’s perspective on hiring is instructive.

Kelleher based his hiring decisions on a good attitude as well as education, experience, and training. As I will explore in detail later in the book, the importance of the level of skill, experience, and training versus attitude toward the job is relative to the job. I doubt whether a good attitude would trump skill, training, and experience when hiring a pilot for a Boeing 737. But Kelleher clearly viewed a good attitude as very important and you probably do too—and, again, you should.

But how exactly do you determine that someone has a good attitude, one that makes the person suited for the job? How do you analyze attitude? It’s a critically important question in making a good hiring decision. And one that we typically answer subjectively. To get the People Equation right, we need to be able to assess attitude objectively, undistorted by our personal biases.

There is a theoretical framework that is useful in analyzing attitude objectively; it is comprised of two behavioral theories: enjoyment performance theory and paradox theory. These behavioral theories explain how a good attitude is shaped and together will give you a framework for analyzing attitude in regard to job performance. Let’s take a look at each theory and how they provide you with a comprehensive framework for assessing attitude and determining suitability.

Behavioral Theory: Enjoyment Performance Theory

Enjoyment fosters a good attitude. It’s that simple. Enjoyment Performance Theory explains that we will tend to have a good attitude toward a job if we enjoy the tasks required by that job, have interests that relate to the job, and like the work environment and type of interpersonal interactions involved in the job. I think of it as having the enjoyment factor. Fundamentally, your suitability for a job is rooted in how much you like or dislike the activities in the job—your attitude toward the job activities.

Understanding the vital role of enjoyment on job behavior, and consciously factoring it into hiring decisions, has helped me make better decisions regarding how to get people into jobs that are right for them and for the organization. I am confident it will do the same for you. So, let’s take a deeper dive into the enjoyment factor.

People who enjoy 75 percent of the activities in their jobs are three times more likely to succeed in the job! That is the finding of Dan