Family Business Performance Technologies

Today's superior organizations no longer take a casual approach to hiring, placement and promotion. Those who want to supercharge organizational performance from the bottom up approach hiring and staffing just as an engineer would design a component to a high performance engine. The fit would be tight, the structure firm, the material the best. No part is too small for the engineer's precision.

Today's superior organizations no longer take a casual approach to hiring, placement and promotion. Those who want to supercharge organizational performance from the bottom up approach hiring and staffing just as an engineer would design a component to a high performance engine. The fit would be tight, the structure firm, the material the best. No part is too small for the engineer's precision.

Although human resources departments cannot "design" people to their specifications, next generation behavioral technologies are increasingly used by Fortune 500 companies to assure good fit, high performance and job satisfaction. New testing technology is "in," it's legal, and it works. "Job sculpting" based in part upon objective testing is now the trend, because it benefits both employer and employee to blend individual work style and attributes with job description (Harvard Business Review, Sept.Oct., 1999 p. 144).

The benefits of objective assessment for family businesses are particularly clear, especially when the founders seek to employ relatives in sensitive, high impact positions or to develop existing employees into creative business leaders for the future. Paradoxically, relatives can be the last to have a cleareyed, objective appraisal of one another. This is due to the alltoonatural tendency to idealize or sometimes depreciate a relative in line with preconceived notions developed since childhood. This is where next generation testing can really help. In fact, hiring or promoting a family member without objective assessment is like driving blind in the family car.

How important is accuracy in hiring and placement? Industrial studies have shown that hiring bestfit candidates increases productivity dramatically. Psychologists Frank Schmidt and John Hunter have shown that total U.S. output would be about $150 billion higher if every employer in the country were to use appropriate selection and testing methods. Consider the costs associated with hiring and placement mistakes:

  • Turnover cost for a production worker is $30,000 (TRW Corp.)
  • For a $48,000 per year professional, it's $76,000 (DDI)
  • For a salesperson, it's $155,000 (Riordan Research)
  • For an engineer, it's $180,000 (TRW Corp.)
  • For a midlevel manager, it's $320,000 (TRW Corp.)

Turnover costs include outprocessing, management downtime, vacancy costs, reduced production, hiring/training costs and many more factors. Testing works in order to facilitate a strategy that will make your business a "bestofclass" performer. Here are a few examples.

Hiring For Customer Service

Customer service is a critical competency for many companies today, forcing them to look for mere mortals who can deliver service at extraordinary levels. These folks are not easy to find. Those skilled at customer relations are more born than made, so organizations have to pay closer attention to personality and temperament in newhires; that means preemployment testing. Some Marriott properties, for example, have been known to reject 90 percent of all applicants for "guest service associate" positions. They are willing to wait and pay the price to hire those with the right personality and attitude to advance Marriott's business strategy.

Testing For EntryLevel "Blue Collar" Jobs

Kimberly Clark tests machine operator candidates for leadership skills. Why? "Ten years ago we didn't expect as much from people. Now we have organizations that foster a high degree of responsibility even at the operator level," says Robert Goebring, human resources manager. Testing helps such companies attract and hire higher quality clerical, service and operator personnel. These companies value the capacity of testing to measure key attitudes and traits such as motivation to serve, productivity, extroversion, and interpersonal finesse. Better service and reduced turnover are the results

Testing At The Top

Smart companies have discovered that assessment programs make an important contribution to selection and development of key senior level people. "People are our business," says the vice president of Great Atlantic and Pacific Tea Company, "and assessment helps us make sure we have the best matches." Testing helps see beneath the surface for qualities of maturity, empathy, motivational dynamics and leadership skill, to better understand if the applicant is of executive timber.

Looking For Hidden Treasure

Just like a sunken treasure deep below the ocean surface, hidden talents in people can be retrieved today because we have new behavioral technology.

Every business has lots of talenttreasure hidden beneath the surface of everyday routine. There are many behavioral clues that may point to these employees, including restlessness, under productivity, excessive socializing and frequent sick days. Often these employees are not "in their groove"—that is, their job descriptions don't match their natural working attributes and style. Rather than outplacement, "creative inplacement" is often a solution that results in a highly charged employee with renewed enthusiasm and productivity.

Take Ellen for example. She was a bright, energetic, committed collegetrained accountant in a large company. Two years into her job, she lost interest in work and was ready to resign. But the company valued her and wanted to retain her talents. The ASSESS Profile found Ellen showed little "detail interest;" she was very positive about people, preferred to work on teams rather than alone and easily assumed leadership roles. Her accounting work took her out of her "natural groove." So she transferred within the company to marketing and stayed on for years.

Testing For Executive Development

Grooming high potentials to become masterful leaders is a necessary concern of family businesses. What skills need to be developed? Where are the candidate's rough edges? What tendencies or traits need polishing, and what competencies need enhanced? Effective testing of midlevel managers sets the stage and the agenda for progress towards leadership excellence. In a recent study by McKinsey & Co., 75 percent of executives surveyed said their company either didn't have enough leadership talent presently or was chronically short of talent. Is your family developing future leaders for your business? An executive assessment is a good place to start.

What Testing Tells You

The ASSESS Profile, developed by Bigby-Havis of Dallas, Texas, is a good example of the "next generation" technology. PC-based on an Internet platform, it requires 4050 minutes to complete from home or office. The resulting profile is reported against a background of norms for more than 25 job titles, describing typical profiles for success in each area. The candidate's posture on 21 different job attributes is described against norms for his or her job title. The ASSESS profile goes beyond popular temperament or typeindicator tests to describe actual work relevant dimensions of behavior in five critical areas. No one trait is good or bad, except in relation to particular job requirements.

Take home point: People can do jobs that don't come naturally (that is, fit their natural preferred working style). But it is much easier and more productive for everyone if there is a good match.

Take home point for family businesses: Unlike engineers, we cannot design people for their positions in the family business, but now we can know how an employee functions naturally and place him/her in a job that fits. If your business expects to employ family members, it is even more important to obtain an objective assessment of the candidate's natural work attributes and style. Don't put relatives in jobs where they don't fit, even if they "belong there" because of family position. In this way your company can join today's bestofclass organizations that translate their human resource potential into a supercharged performance.

Reprinted with permission from The Family Business Report sponsored by the Goering Center at the University of Cincinnati College of Business Administration.