Why today's managers may have it wrong
People are the most important factor in a business. However, recent research has found that some traditional Human Resource (HR) practices are ineffective. Is it time for a new approach?
Fifty years ago, paying a visit to the doctor could be risky business. In lieu of robust research, some medics drew on their own beliefs and individual experiences to devise ‘wonder’ treatments for their patients that could end in devastating results. Now, evidence-based medicine, greater reliance on research and the use of clinical trials has led to safer, more effective treatments.
Today, some areas of management and leadership are in a similar position to where medicine was 50 years ago, says Professor Julie Cogin, Dean of The University of Queensland (UQ) Business School and an expert on talent management.
“Many managers make decisions based on intuition, gut feel, or without knowing or questioning the quality of the data. They miss an opportunity to use sound research to guide more effective practice,” says Professor Cogin.
“Anyone with a LinkedIn account can present themselves as a thought leader and distribute advice based on personal experience. I have seen reports released which are based on anecdotal evidence or data that has not been subjected to a robust design, often lacking rigour in collection or analysis.”
An evidence-based approach to human resourcing and management is all-the-more critical given the important role that employees play in business success.
Professor Cogin reviewed different aspects of people management and compared research findings with common practice to identify some gaps and opportunities.
Recruiting the right people
One global study involving 30 000 participants asked senior managers what they believed the main impediment was to profitably growing their business, the overwhelming answer was "access to talent". Having the right people in place at the right time is a critical factor to a successful business.
When it comes to recruiting, interviews are by far the most common source of information which manager’s base selection decisions on. However, evidence shows that interviews are not reliable. One of the biggest studies on the subject found that the ability to predict performance on the job using this traditional practice was little better than chance. However, the success rate can be improved by using behavioural interview techniques and structuring the interview.
Academics Frank Schmidt and John Hunter summarised 85 years of research, covering thousands of applications and jobs. They found that the most reliable predictors of performance on the job were work samples and general mental ability tests, yet less than 15 per cent of firms use them at senior levels.
Professor Cogin says, “In recruitment interviews, it is easy to base decisions on unconscious biases and end up choosing people who are like ourselves, rather than someone who will approach a problem from a different perspective.”
“Psychological assessment is a much more reliable predictor of performance on the job. People argue that tests take too long or are only suitable for highly skilled jobs. Research shows the opposite. A psychological assessment such as a cognitive ability test predicts performance at all levels – in simple and complex jobs, and it can be administered in 20 minutes,” says Professor Cogin.
Motivating the team
Staff motivation is key to improving organisational performance, though it is important to distinguish between motivation and job satisfaction.
In recent years, many organisations have made a real effort to engage staff in decision making and cite involvement in the process as a necessary ingredient for motivation, however, does the evidence show it works?
Professor Cogin says, “Involving employees in decision making can increase job satisfaction, however, when overdone it can become a time-waster and leave employees sceptical. There is a fine line between involving people in an authentic way and doing it for the sake of it. There are times when explaining the rationale for a decision is sufficient.”
One method that can have a powerful impact is setting challenging goals and getting people to agree to them. However, it is imperative to choose the right goals.
In his classic article, On the folly of rewarding A while hoping for B, academic Steven Kerr pointed out that people tend to do the things they are rewarded for rather than the things they ought to do. Typical mistakes include rewarding key individuals when trying to encourage team collaboration, or rewarding short-term results while aiming for long-term sustainability.
Professor Cogin adds, “Goal-setting requires real skill. Managers should not focus on narrowly-defined goals but also pay attention to the behaviours they create.”
“One company I consulted for wanted to improve safety. The firm gave bonuses to teams for reducing the number of incidents. Consequently, teams covered up problems or did not report safety issues. They would have been much better off to reward the identification of hazards and management of risks.”
Retaining staff
Staff retention is another challenge. There can be a number of reasons why people choose to exit. For many years the main reason staff quit was due to lack of challenge or opportunity. Today, the most common reason is a conflict with a boss or colleagues, surprisingly not remuneration according to the latest research.
Professor Cogin believes this is linked to the growing pressure faced by staff and managers at a time when many industries are facing disruption. Employers should take steps to reduce conflict, insecurity and tension.
“Organisations are complex, and there’s no magic recipe for doing everything right when it comes to talent management. However, a growing body of research is emerging that suggests managers will stand a greater chance of success if they draw on research evidence to guide practice,” says Professor Cogin.
By using an evidence-based approach to recruitment and people management, Professor Cogin believes workplaces can thrive, even in disruptive business landscapes.
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