The Bottom Line Benefits Of Employees Who

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The Bottom Line BenefitsOf Employees Who
FitJonathan Canger, Ph.D.TMP
Worldwide/MonsterHUGO Assessment Group

• The USF HR ROI Conference
• January 17, 2003
• Tampa, FL

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Agenda

• The Big Picture
• Model The Roles of H R
• Person-Organization Fit
• Processes for Selecting For Fit
• Where Does Selecting For Fit Fit?
• Estimates Of ROI Vs. Reality
• What Else?

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The Big Picture (Pfeffer, 1994)

• In 1972, How Would You Predict The 5 US
  Companies With The Largest 20-Year Return?
• (1972-1992)

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The Big Picture (Pfeiffer, 1994)

• Conventional Wisdom Says
• (a la Michael Porter, Competitive Advantage)
• Pick The Right Industries
• Barriers To Entry
• Substitute Products/Services
• Power of Suppliers
• Power of Buyers
• Rivalry Amongst Existing Players
• 2. Pick Companies With Dominant Market Share

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And The Winners Were.

• Southwest Airlines (21,000)
• Wal-Mart (19,800)
• Tyson Foods (18,100)
• Circuit City (16,400)
• Plenum Publishing (15,700)
• None of Which Would Have Made Porters List

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The point here is not to throw out conventional
strategic analysis but simply to note that the
source of competitive advantage has always
shifted over time. What these five firms have
in common is that for their sustained advantage,
they rely not on technology, patents, or
strategic position, but on how they manage their
workforce. Jeffrey Pfeffer, Competitive
Advantage Through People, Harvard Business School
Press, 1994
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Human Resource RolesA Model
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Future/Strategic Focus
Day-To-Day/Operational Focus
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Future/Strategic Focus
People
Process
Day-To-Day/Operational Focus
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Future/Strategic Focus
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
Day-To-Day/Operational Focus
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Future/Strategic Focus
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
2. Employee Champion Managing
Employees Contribution
Day-To-Day/Operational Focus
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Future/Strategic Focus
3. Change Agent Managing Transformation
And Change
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
2. Employee Champion Managing
Employees Contribution
Day-To-Day/Operational Focus
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Future/Strategic Focus
4. Strategic Partner Aligning HR and Business
Strategy
3. Change Agent Managing Transformation
And Change
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
2. Employee Champion Managing
Employees Contribution
Day-To-Day/Operational Focus
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Where Do You Focus?

• Where are you expected to focus?
• Where can you do the best job?
• What does the organization need?
• Where can you have the biggest impact?
• Whats your history with the roles?

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Sample Results HR Roles Survey Highest Rated
Items (3.7 or Above)

• WHAT HR IS DOING
• HR participates in delivering HR processes (3.89)
• HR spends much of its time listening and
  responding to employees issues (3.89)
• HR helps this organization take care of
  employees personal needs (3.70)
• HR SHOULD BE MEASURED BY
• its ability to efficiently deliver HR processes
  (4.3)
• its ability to help the organization anticipate
  and adapt to future issues (4.22)
• its ability to help meet employee needs (4.03)
• its ability to help make strategy happen (3.84)

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Sample Results HR Roles Survey Lowest Rated
Items (Below 3.1)

• WHAT HR IS( NOT) DOING
• HR spends much of its time on strategic and
  business issues (2.69)
• HR participates in the process of defining this
  organizations business strategies (2.70)
• HR is seen as a change agent (2.73)
• HR help this organization improve operating
  efficiency (2.95)
• HR helps this organization adapt to change (3.03)
• HR spends much of its time supporting new
  behaviors to keep the organization competitive
  (3.03)

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Is
Future/Strategic Focus
SB
4. Strategic Partner Aligning HR and Business
Strategy
3. Change Agent Managing Transformation
And Change
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
2. Employee Champion Managing
Employees Contribution
Day-To-Day/Operational Focus
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Focus On Selection / Talent Acquisition

• Sets The Upper Limit On Organizational
  Performance
• Cant Develop Everyone For Everything
• Turnover Is A Certainty
• War For Talent Will Rise Again

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Rethinking Selection

• Traditionally, organizations have selected
  employees based on applicants KSAs and job
  requirements.
• This has led to a focus on
• Cognitive ability
• Specific knowledge and skills relevant for a
  particular job

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Rethinking Selection

• In addition to predicting performance in a
  specific job, new goals include predicting
• Satisfaction (Judge et al. 2001 meta-analysis r
  between job satisfaction and job performance is
  .30 52 for complex jobs!)
• Tenure
• Contextual / Citizenship performance
• Effectiveness in teams
• Effectiveness in diverse jobs

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Do You Want To Be An Employer Of Choice?
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Do You Want To Be An Employer Of Choice?
Can You Afford To Be An Employer Of Choice?
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Person-Organization Fit

• Definition Person-Organization (P-O) fit is the
  congruence of an individuals personality,
  beliefs, and values with the culture, norms, and
  values of an organization

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Why Worry About Fit?

• Jennifer Chatman (1991) showed that assessing the
  congruence between a candidates values and the
  prevailing values of the organization predicted
• Job satisfaction 1 year later
• Intent to stay with organization 1 year later
• Actual turnover 2.5 years later

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P-O Fit Involves the Soft Underbelly
Can Do
Could Do
Experience Skills
Prefers To
Tends To
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How Do You Do The Matching?

• Successful Person Profiling Find candidates who
  are similar to the people who fit well in the
  organization now, in terms of their personality
  and values
• Organization Culture Profiling Assess the
  current culture or prevailing values and find
  candidates who would like that environment.

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Example1 Personality Profiling --Candidate vs.
Successful, Good Fit Incumbent
Emotional Stability

• .

Extraversion
Openness
Agreeableness
Conscientiousness
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Example2 Candidate Organization Preferences vs.
As Is Organization

• .

Experience Skill Requirements
Experience Skills
Candidate
Organization
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Example2 Candidate Organization Preferences Vs.
As Is Organization
Newcomer Integration

• .

MgtEmployee Relations
Continuous Learning
Information Exchange
Casual Atmosphere
Profit Orientation
Individ. Expressiveness
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Where Does Selecting For Fit Fall in The Model?
Future/Strategic Focus
4. Strategic Partner Aligning HR and Business
Strategy
3. Change Agent Managing Transformation
And Change
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
2. Employee Champion Managing
Employees Contribution
Day-To-Day/Operational Focus
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Future/Strategic Focus
4. Strategic Partner Aligning HR and Business
Strategy
3. Change Agent Managing Transformation
And Change
People
Process
1. Administrative Expert Managing The Firms
HR Infrastructure
2. Employee Champion Managing
Employees Contribution
Day-To-Day/Operational Focus
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Assessing ROI For Selection

• Been Around For A While (Taylor-Russell Tables -
  1930s)
• Tables Already Built That Predict The Average
  Increase In Performance Expected, Per Cent
  Increase in Satisfactory or Superior Workers,
  etc.
• Also Have Formulas To Predict Dollar Utility of
  Selection Procedures (Brogden, 1948
  Cronbach-Glesser, 1965)

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Effect Of Validity On Satisfactory Workers
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Effect Of Quality of Candidates On Test Impact
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Effect Of Per Cent Of Candidates Hired (Selection
Ratio)
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Why Dont We Use Utility / ROI Analyses More?

• Not Familiar With The Models
• Need To Collect Data
• Complexity (Formulas / Number of Variables)
• Frequently Yield Unrealistic Results
• Managers Arent Swayed By Them

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So Whats The Bottom Line? 10 Suggestions

• Keep The HR Roles Model In Mind Try To Impact As
  Many Quadrants As You Can Prioritize
• Use Technology To Enhance Your Below-The-Line
  Quadrants (or consider outsourcing)
• Use Multiple Metrics, and Involve Decision Makers
  In The Design Of Any Metrics (Execs, Finance,
  Ees)
• Align With Company Strategy And Objectives And
  Look At Larger, Organization Wide Outcome
  Performance Data, even If Contaminated
• Use Concurrent Validation Studies If we
  implement this procedure, wed have 10 more Marys
  and 10 less Bobs

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So Whats The Bottom Line? 10 Suggestions

• Consider Fit Initiative Become an Employer of
  Choice for The People That Fit, not for everyone.
• Learn The Business and What Competitors are
  doing, and tell Management
• Distribute The Watson-Wyatt Study, along with
  your summary, to your executives
• Build Your Own Version of Watson-Wyatt Study
  What predicts Tenure commitment in Your
  Organization? and combine with EOS
• Partner With Finance, but Learn From Sales
  Marketing

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The Bottom Line BenefitsOf Employees Who
FitJonathan Canger, Ph.D.TMP
Worldwide/MonsterHUGO Assessment Group

• The USF HR ROI Conference
• January 17, 2003
• Tampa, FL

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