Introducing the Sales Acumen Survey.

The Sales Acumen Survey is designed to help your clients discover an individual’s awareness and knowledge of the strategies necessary for sales success at key stages of the sales process in the consultative oriented sales model. It helps your clients determine who needs training and what areas of training each salesperson requires.

No longer will your clients have to shotgun their approach to providing knowledge and skills training for their sales team. Now, they will have valuable, specific information on the training needs of every salesperson that completes the Sales Acumen Survey.

It’s often said the best salespeople are “born – not made.” This may be true for traits such as resilience, assertive and serious minded. However, it’s not true for the essential processes and skills associated with effective selling. They must be learned.

So what are the elusive knowledge and skill sets that separate successful sellers from the less successful salespeople? They are the seven key areas of the sales process that a salesperson must understand to meet the needs of the customer and deliver strong sales for the organization.

Knowing how to approach a sales situation comes naturally for some salespeople. Other salespeople need to improve their understanding and application of the steps necessary to increase their sales effectiveness to achieve sales success.

The Sales Acumen Survey measures those areas of knowledge and skills that can be learned by the salesperson to help him/her achieve sales success. These areas are prospecting, first meeting, probing, presenting, influencing, working through objections, closing and general sales knowledge.

Each area of the consultative sales process measured by the survey have 10 questions designed to provide an in-depth look at the salesperson’s understanding of that important phase of the sales process.

The salesperson’s results are placed on a scale of 0 to 100 for each of the areas measured by the Sales Acumen Survey. The higher the salesperson scores in each stage of the consultative sales process measured by the survey, the better his or her knowledge is in this particular selling stage.

Coaches are the toughest critics we know, so we invite you to see for yourself!

To test drive the Sales Acumen Survey and receive your FREE Sales Acumen Survey report, please call 800-416-9570/651-452-8256 or email to BillJr@maximumpotential.com.

We’ll process your free report and email it to you for your review and use. We’ll share with you how you can begin offering the Sales Acumen Survey to your clients, while generating additional profits for your business.

Sincerely,

Bill Schult Sr.

President

Maximum Potential Inc.

Hiring A Players for your organization can result in a financial gain of 10 to 100 times their annual compensation.

To determine the tremendous financial impact of moving salespeople from your bottom half into your top half, consider creating three categories – Your Best, Your Second Best and finally the Not So Good. By conducting this exercise you will have created three categories of the same size.

Your Best, which comprise the top third, are those salespeople who are the foundation of your organization. These  are the hard working salespeople, who go beyond what is expected, that produce high quality results every time. These are your salespeople who need little direction, are team players, getting along well with everyone. It is difficult to hire these high-quality, top performing salespeople if your hiring process is flawed.

Your Second Best, are those salespeople who can get the work done with some direction, work well, for the most part, with others, are technically strong, work to get the job done in a crisis and often get promoted to larger territories if there is no one else who is better qualified. Most times they will not be the first person considered for the promotion.

The Not So Good are those salespeople who just never seem to be a fit with the organization. It could be that they are in the wrong job, or they need additional coaching and mentoring to produce average results. These salespeople seem to be a magnet for conflict with other team members. These Not So Good salespeople are most times hired because they have interviewed well, come across as friendly and enthusiastic and look to have the necessary experience. For many organizations this group represents, at a minimum, one-third of their entire sales team and this becomes a huge problem.

Hiring managers and HR personnel said that when the Second Best and Not So Good salespeople were hired, they appeared to have all the requisite qualifications. Yes, they had the right degree, the right skills and experience. However, something seemed to go wrong after the hire that led to their under-performance on the job and ultimate termination. Most times the inability to perform the job at a high level was the result of the salesperson not having the right behaviors and/or competencies necessary for successful long-term job success. This translates into under performance on the job, little or no interest in the job, strained relationships with their manager, few team skills, poor work habits and a cultural misfit for the organization.

The expense of hiring Not So Good salespeople is huge. A method to calculate this expense is to look at what is termed the Average Profit per Salesperson. For demonstration purposes, let’s assume that the average profit per salesperson is $100,000. Remember that this example does not take into account the differences in territories and sales experience, but we can still make a good point.

Now consider that your Best performing salespeople produce at an average of 20% more than your Second Best or middle category, resulting in average profit per salesperson of $120,000.

Next, assume your Not So Good salespeople are 20% less productive than your Second Best, this means they will produce an average per salesperson profit of $80,000. This is $40,000 less than the per salesperson profit your Best salesperson category delivered.

This means that for each Not So Good salesperson you replace with a Best salesperson, your organization would make an additional profit of $40,000. If this were your organization, you would realize an additional profit of $400,000 for 10 salespeople and $4 million by replacing 100 Not So Good salespeople.

Looking at the results of our demonstration, it is quite easy to endorse the implementation of hiring only candidates who fit the top third category. Making this happen will not or is not an easy strategy to execute. There is no rabbit’s hat to pull the Best performers from, no magic bullet that will make it easy to begin hiring more top performers.

You need to know that the Best category of salespeople looks for jobs in a different manner than the other two categories. This category of salesperson will often learn about new job openings from a referral from a friend, neighbor or networking with other top performers. So, if your organization has made a decision to hire more Best performing salespeople, it would be a good business decision to concentrate your recruiting and hiring efforts in the above areas and rely less on job boards for your job candidates.

Should you want to continue using job sites to get additional job candidates it would make great sense to write a number of ads you think will appeal to the Best category of job candidates. Include such areas as potential for career advancement, opportunity to meet new challenges and to have an immediate impact on the organization’s success. See which ad consistently attracts the candidates who become your Best performers.

The Best category of salespeople is typically looking to build a career and this may well be the main reason for their delivering top performance on a consistent basis. These candidates are in search of more information and the need to ask more questions in the hiring process in their quest to find a career. Their needs are in stark contrast to the Not So Good candidates who are simply looking for a job with a paycheck.

So, your organization needs to be mindful not to rush into job postings that are, quite frankly, boring. Hiring the Best category of salespeople is more than just job postings, the interview or interviews. Take some time; build a solid hiring system that gives the Best category candidates a process that will allow them to prove they are a Best candidate.

Most hiring mistakes occur when we use only interviews to make our hiring decision. Yes, I know that structured, behavioral based interviews are all the rage in HR circles, but no one is talking about how candidates prepare for these interviews. You may not want to believe me, but the candidates often go to the book stores for books like, “The 100 Best Answers to the 100 Toughest Interview Questions in their attempt to win you over and get the job.

What are you to do? According to a recent Aberdeen survey they use an assessment like 51% of the successful, top performing organizations are doing during their hiring process. Compare your candidates to a validated and predictive success profile or use a well-developed competency model to help you determine if the candidate has the potential to be in the Best category of salesperson for your organization.

A well designed, validated assessment provides the most objective look you will get for every job candidate during your hiring process. Everything else is subjective and when you are investing tens of thousands, even hundreds of thousands in salaries and benefits for each salesperson in your organization, it is important to bring some objectivity to your hiring process.

You and your organization should make hiring into your Best category a goal for every salesperson hire. You must do this if you desire to increase the talent within your organization, while increasing your Return on Investment per Salesperson.

We can help you hire more Top Performing Salespeople with our Validate and Predictive sales test. Discover what our pleased clients already know. Top Performers hired with our sales test have the potential to produce 1 ½ times to 2 times the sales results underperforming salespeople typically produce.

If you have 20 or more salespeople and would like to test drive our sales test risk free, please respond to this email or call us at: 800-416-9570 or 651-452-8256.

We’ll be pleased to help! We confident you will say you are glad you did!

Sincerely,

Bill Schult Sr. CBA, CBMA

President

Maximum Potential Inc.

Most people would not choose to build a house on a weak foundation. Why then do leaders risk the company’s future on an untested, inexperienced employee?

To keep them motivated?

To ensure they stay with the company?

But at what cost—to the employee, the employees who work for them and the company.

Yes, if you want to retain your top employees, you must…

• Give them a reason to stay
• Find a way to motivate them
• Reward them.

But, if you reward too much, too fast—it can be dangerous for your entire organization.

In order for companies to retain top talent and stay competitive in today’s market they are engaging in moving selected employees quickly to or through managerial levels in an organization.

5 Reasons Why This is a Dangerous Strategy for Increasing Employee Retention

1. Skills can often be learned; but experience takes time. In order to be an effective leader, your managers need to gain experience in:

• Correctly identifying and solving problems
• Framing and making good decisions
• Dealing with the myriad of people-related issues that confront every manager in every organization
• Organization course correction
• Role-based leadership

2. Many times, when your organization engages in Rapid promotions, a new manager will set a new initiative in motion and then leave the position before the impact of the initiative is realized. They are missing the day-to-day experience of interpersonal behaviors and interactions that come with any transition—the intangible. It’s these subtleties that are often missed. And it’s these subtleties and the way you handle them that hones a good leader.

3. Each managerial level brings new challenges and requires different skills and behaviors. Moving too quickly through an organization runs the risk of missing critical experiential learning. Experience is accretive and it is difficult to learn vicariously. What you learn today you use as a framework for how you behave and react tomorrow. Short changing this learning cycle can result in a leader derailing later.

4. When leaders derail because a company engaged in Rapid promotions in order to retain top talent, it creates a disastrous domino effect for the organization as a whole. We all know that the number one reason people leave a company is because of their immediate supervisor. We also know that poor decisions and poor problem solving skills can result in service and profitability deterioration for a company.

5. Rapid promotions create a winner / loser environment within the company. Unless you want to build a highly-competitive, stressful environment and internal culture that makes your employees hate Mondays because it is the start of a work week, creating winners and losers is not a good long term strategy.

Why Companies Engage in Rapid Promotions Even Though it’s Dangerous to the Health of their Organization

Companies need to grow talent internally and ensure smooth management transitions. And the reality is that some industries are disproportionally affected by talent shortages (such as healthcare) and may have no other choice than to promote an employee who is truly not ready to handle the position.

(This is a common practice for technical and clinical staff promoted to management).

So what should you do?

7 Tips for Retaining Top Talent without Hurting Your New Manager, Employees and the Company

1. Develop a succession plan for your company. This means get committed to a process or structure of internal management and talent development.

2. Identify individuals within the organization who have the potential to move into leadership positions. You should be identifying multiple candidates for each position. Don’t be afraid to take some risks in candidate identification. Not all high potential candidates initially present an outgoing and aggressive demeanor (and remember these qualities do not necessarily ensure a good manager.)

3. Provide the identified individuals with opportunities to take on additional projects to demonstrate their skills as well as their ability to learn and grow. The projects should create the opportunity for the candidates to “live” with the consequences and take responsibility for their actions and decisions.

4. Provide new managers with an internal mentor and an external coach to insure support during the transition process. This support should be for at least six months to one year. This process is referred to as: transition integration.”

5. Give all new managers a personality and job performance assessment. This is a valuable tool in identifying emerging leader attributes and potential risk areas. Now you will be able to enable early intervention and prevention and give the most effective support to the new manager. This is better than the “sink or swim” approach to learning that new managers are often thrown into.

6. Provide all candidates with self-assessment tools and learning opportunities. Do this both within the organization in the form of added responsibilities and through outside learning opportunities such as conferences and executive education programs, professional memberships.

7. Monitor your new manager’s progress (through the supervisor and mentoring and coaching support) and review your succession plan each year. Evaluate the success of the current program and the individuals in the program. Improve where necessary and identify and support new leadership candidates.

Be aware that some candidates simply may not be interested in this more protracted and performance based approach. They may feel threatened or choose to leave. That’s OK too. The risk of promoting too quickly and the derailment that could occur is not worth the harm an unprepared manager can bring to the organization.

Talent is to be developed, not anointed.

Hiring top sales people is tough. It is not easy to find top performing salespeople. The odds of hiring “A” salespeople are less than 25%. Many organizations have many more marginal, “C” salespeople.  “C” salespeople do not have the right stuff and cannot win the customers your organization really wants. If your organization keeps its poor performing “C” salespeople, they are most certainly going to cost you millions in lost sales, profits and lots of frustration.

Failure to consistently hire top sales people that are a fit for your organization results in another problem, high turnover in your salespeople. In an article in the Wall Street Journal said that turnover costs are $150,000 per sales person on average.

Good news for your organization: you can remedy these problems when you establish a proven process for hiring top salespeople. 

Here is a proven 7-step process for hiring top salespeople:

1. Determine Your Ideal Salesperson Criteria. What skills, habits, strengths, and motivations do you need? What do top salespeople who sell to your ideal customers actually do?
2. Attract Top Salespeople. The major online job sites are a good place to start. Write an ad that describes the top salesperson, their experiences and their accomplishments; you want top salespeople to say “that’s me”. For example, “You must have successfully sold services like ____… to people like____. You have earned at least _____. You are good at ___, ____, and _____. You’re looking for a company that ___, ___, and ___.”
3. Assess All Candidates. Consider letting a well validated and predictive assessment perform your first screen. Don’t look at the resumes of candidates. Many potential top performing salespeople are screened out in this manner. A good assessment not only saves time, but also delivers more qualified candidates!  A validated and predictive assessment is critical to getting more of your sales hires to be in your “A” category.

4. Qualify and Challenge.  First, by phone if possible, conduct a tough, brief interview to further qualify your sales rep candidates.
5. Interview.  This longer, if possible and recommended, in-person interview needs to challenge each candidate to confirm that they are truly qualified and a fit for your company. Have at least two people participate in this step to minimize your personal bias, and make sure they have the necessary skills to interview effectively.
6. Persuade. Here is where you go from being purposely tough on the candidate to being a top salesperson. This is now your opportunity to sell your candidate on their very important role, their potential rewards, on the organization, and on the organizations’ leadership.

Onboarding. Prepare a comprehensive plan for your new salesperson’s first 90 days. Reach beyond product training and organizational orientation and develop a Quick Start plan that includes goal setting, sales training, coaching, accountability and other actions. A well prepared and executed 90-day training plan can improve your success rate with your new “top” salespeople from over 90% to near 100%.

Assess Before the Interview
If you look at the proven seven-step process closely, you will note that the assessment takes place before the interview. You may be thinking this process can be too expensive or not result in your getting enough candidates. The truth is assessing before interviewing is actually less expensive. You will most times get up to 50% more qualified candidates, and you are EEOC compliant.

Criteria for Selecting Your Assessment

This proven process of hiring “A” salespeople solves the problems of the typical hiring process, and it relies on a well validated and predictive assessment to screen your candidates. Here are some criteria for selecting an assessment:

• Accurate: The assessment’s validity needs to be verifiable or you will lose good candidates, waste time and possibly hire a bad candidate.
• Pursue / Do Not Pursue: The assessment must provide this, so that you only interview those high potential sales candidates.
• Prepares an interview: The assessment prepares an interview based on how the candidate scored. This gives you the ability to get beyond the “pat” interview answers the candidate has taken from how to interview books and multimedia to discover potential issues.
• Identifies the candidate’s strengths/weaknesses: So you will know the candidate’s specific training needs and the likely issues to expect if you hire them.

If you do not have a consistent sales hiring process your “C” salespeople will consistently lose to better salespeople. You and they will have to discount your products or services to win. You will consistently have trouble getting the bigger, better, and more profitable customers. Your business will not be growing like you know it should.

How do I know? I’ve been there. I’ve hired “C” salespeople and been through the frustration that making the wrong hire can cause. My organization lost business I know we should have won.

The good news is this: you do not have to wonder whether a sales candidate will sell for us. You can know if a sales candidate WILL SELL! You can attract, hire and retain more “A” salespeople and you can help them be successful quickly. You can survive a tough economy; in fact, with top salespeople, you can gain market share and thrive.

Imagine your organization with top sales people: You now win the bigger, better, more profitable customers. You are not only surviving, you are prospering. If you like this picture for your business, find out how you can implement a proven sales hiring process in your business.

Think twice Before You Hire Your Competitor’s Salespeople

By

Bill Schult

Hiring salespeople from your competition may seem like a great idea, but there are many drawbacks if this is your organization’s hiring strategy.

Wouldn’t it be great if we could plant a few seeds in the ground, fertilize them, water them and a great salesperson would grow right before our very eyes.. This is truly a flight of the imagination, but it is a plan often followed by business owners and sales management in their pursuit to find great sales talent. Instead of growing their own, they try to steal from their competitors.

Think twice Before You Hire Your Competitor’s Salespeople

By

Bill Schult

Hiring salespeople from your competition may seem like a great idea, but there are many drawbacks if this is your organization’s hiring strategy.

Wouldn’t it be great if we could plant a few seeds in the ground, fertilize them, water them and a great salesperson would grow right before our very eyes.. This is truly a flight of the imagination, but it is a plan often followed by business owners and sales management in their pursuit to find great sales talent. Instead of growing their own, they try to steal from their competitors. Why not? they often think that their competitor is much better at growing a sales organization than they are. They will grab some sales talent from their competitor’s sales team and enjoy great sales success.

When do you think your competition begin building a better sales organization than your’s?

 Before you try to pick what you think are top performing salespeople from your competitors, consider these five caveats when attempting to hire your competitor’s salespeople.

Caveat #1. “Hiring your competitor’s salesperson will have him/her hitting the ground running with no training.” Some of the attraction of hiring from your competitors’ sales team is utter indolence. The thinking is, hire a salesperson from the competitor and generate instant revenue. You won’t have to train them; they already know everything. To say the least, this is flawed thinking. It is important to remember that salespeople will always need training and development regardless of who they sold for previously.

Every once in a while, you will get lucky and hire a rainmaker. More times than not, this approach is a formula for a making a bad hiring decision. Here’s something to think about. What level of salesperson do you actually think are available from your competitors? Seldom is it their top performers. Most times it’s the bottom 20% that your competitor is probably very happy to see leave.

Caveat #2. “Our industry is so involved that we have to hire salespeople from within it.” How true can this be? No salesperson was born mastering your industry, not even you. You were taught it and learned it like everyone else. If you honestly feel that industry experience is the uppermost requirement, be prepared for another major challenge. There are only so many people in your industry and very few that you will consider hiring. At some point, your talent pool will dry up.

Salespeople need to have a particular level of knowledge to successfully sell in a given industry. Your goal is to determine what they need to know to be effective and develop training tools to get them up to speed promptly. Identify resources within your organization that will help them with their questions. Test their knowledge retention along the way to make sure they are getting it.

Caveat #3. “They’re going to bring a big book of business to our organization.” Before you buy into this fantasy, consider these arguments. First, despite what they tell you, it is very difficult to  actually move clients. The hassle of change is not one that is easily addressed with clients. It is uncommon to find a salesperson who is so influential that he/she can overcome this dilemma.

It is important to note that the salesperson doesn’t own the clients; their employer does. While most non-competes don’t hold up in court, client list protection does. And, you can put your organization at risk in this tricky situation. Do you actually want to have that sticky situation?

Don’t think for a minute that the salesperson you hire today will retire with your organization. They will leave you some day, just like they left their former employer. Think about your salesperson attempting to take your clients with them when they go. It doesn’t feel very ethical, does it? And, it’s the wrong reasoning to use when hiring a salesperson.

Caveat #4. “We’re a smaller firm and we could surely use a salesperson who comes from a large competitor.” This argument can be true if your organization and your large competitor are identical twins. A match between your company and the candidate is necessary to put together a long-lasting sales marriage.

The problem with the above caveat is that it assumes there is a complete sales culture match. Every sales organization is different, even within the same industry. Your large competitor may have lots of sales support for prospecting and presentations, while your company places the entire responsibility on the salesperson. The salesperson at your competitor may have great name recognition in the marketplace while you do not. Accordingly, a different skill set will be needed to get in the door with prospects. The list goes on and on.

The key is to develop a profile of your ideal sales candidate with the required and desired attributes; then recruit, interview and use validated assessments to ensure you are hiring the best qualified candidates.

Caveat #5. “Since they have been in our industry, they are enthusiastic about it, and enthusiasm sells.” Without a doubt enthusiasm sells, but it’s a wrong assumption that these salespeople come to your organization with enthusiasm. Salespeople who bounce from organization to organization in an industry become “run of the mill salespeople.”

Years ago, I had a salesperson on my team who had sold for severalof our competitors before we liberated him. I made sales call with him, and the calls were interesting to say the least. He could have had any of his former employer’s business cards in his hand, or ours for that matter, and everything he said would have been accurate. The problem, with him was that there was no enthusiam for anything in his presentations. It was all generic information that failed to trigger any excitement in the prospect.

The key is develop a profile of your ideal sales candidate with the required and desired attributes; then recruit, interview and use validated assessments to ensure you are hiring the best qualified candidates.

These steps will help you find the right sales talent for your team regardless if they worked for your competition or not.

To learn how you can hire more top performing salespeople please call us at: 800-416-9570/651-452-8256 or email us at: info@maximumpotential.com we’ll be pleased to talk with you.

Negotiating with the Four DISC Styles

By

Bill Schult CBA, CBMA

Here are some tips on how each of the DISC styles approach the business of negotiations.

When we work with others we are often called upon to negotiate with them. Projects get done faster when we understand the keys to successful negotiation with the different DISC based styles.

How do we negotiate successfully with each of the DISC styles?

You will find some helpful hints on this topic in the next four paragraphs. You have my permission to use this information in your coaching and workshops.

DISC Styles and Negotiation

Understanding a person's Primary or basic style can be quite helpful in the negotiating process. Each behavioral style has a preferred method when it comes to negotiating. By developing a better understanding of each behavior's negotiating style more sales can be made, problems resolved and relationships can be maintained at a higher level.

Dominants

The High Dominant style is a tough negotiator. This style wants to be in control and project his or her authority. Dominants will want to take charge of the negotiating process and control it from beginning to end. When in negotiations with this behavioral style it is important to remember that any outward attempt to challenge or control the High Dominant will most often result in failed negotiations. This style will respond best when they are given suggestions, rather than the here is what we are going to do, take it or leave it approach. The High Dominant will most times tell you they are leaving it. Options work much better than opinions with the High Dominant. Let the High Dominant know you are open to an alternative approach. This can often result in their being more receptive to your offer, as they don't feel cornered or boxed in.

Influencers

One of the most important things you can do when in negotiations with the High Influencer is make an extra effort to build a positive relationship with them. They look for and want positive relationships in their business and personal lives. The High Influencer will be more open to look at new or unique negotiating solutions if they feel they have a personal connection with the person doing the negotiating. Attempting to negotiate with this behavioral style using confrontation will almost always be received negatively. Winning in negotiations with the High Influencer can be accomplished by sharing how your recommendations or proposals have provided positive results for other customers and clients.

Steadiness

The High Steadiness behavioral style tends to be more willing to agree and compromise than each of the other three styles. This style will make every effort to avoid confrontation or conflict in the negotiating process, as they do in other parts of their lives. The High Steadiness's main focus is the relationship. They will often consider any offer and even accept a negotiated compromise that would be unacceptable to the other styles to maintain a relationship. This style does not respond well to pressure and will not make a commitment quickly, rather they will need time to consider your negotiating offer before making a decision. Do not leave a negotiating session with the High Steadiness without an appointment or time set for your follow-up meeting. Their way of not accepting an offer is to be too busy to see you when you call for a follow-up meeting.

Compliants

Negotiating with the High Compliant can be frustrating and intimidating. This style negotiates based on facts, data, information and proof. They want to know that they have all the specific details involved in the negotiations, so they can make an informed decision. The High Compliant will advance the negotiations into areas the other three styles haven't thought about or even considered. You will be wise to say what you mean and mean what you say in your negotiations with them. Plan to invest a fair amount of time answering their questions. This style will ask many questions, perhaps more than you think you can answer. Be patient, they want to be certain they are making the best negotiating decision possible and not unlike the High Steadiness will need time to reach a firm decision.

Failure is an Expensive Option

By

Bill Schult CBA, CBMA

Hiring A Players for your organization can result in a financial gain of 10 to 100 times their annual compensation.

To determine the tremendous financial impact of moving employees from your bottom half into your top half, consider creating three categories – Your Best, Your Second Best and finally the Not So Good. By conducting this exercise you will have created three categories of the same size.

Your Best, which comprise the top third, are those employees who are the bedrock of your organization. These people are the hard workers, who go beyond what is expected, who produce high quality results every time. These are the employees who need little direction, are team players, getting along well with everyone. It is these same employees who are often on a fast track for promotions. It is difficult to hire these high quality, top performing employees if your hiring process is flawed.

Your Second Best, are those employees who can get the work done with some direction, work well, for the most part, with others, are technically strong, work to get the job done in a crisis and often get promoted if there is no one else who is better qualified. Most times they will not be the first person considered for the promotion.

The Not So Good are those employees who just never seem to be a fit with the organization. It could be that they are in the wrong job, or they need additional coaching and mentoring to produce average results. These employees seem to be a magnet for conflict with other team members. These Not So Good employees are most times hired because they have interviewed well, come across as friendly and enthusiastic and look to have the necessary experience. For many organizations this group represents, at a minimum, one third of their entire employee count and this becomes a huge problem.

Hiring managers and HR personnel said that when the Second Best and Not So Good employees were hired, they appeared to have all the requisite qualifications. Yes, they had the right degree, the right skills and experience. However, something seemed to go wrong after the hire that led to their underperformance on the job and ultimate termination. Most times the inability to perform the job at a high level was the result of the employee not having the right behaviors and/or competencies necessary for successful long term job success. This translates into under performance on the job, little or no interest in the job, strained relationships with their manager, few team skills, poor work habits and a cultural misfit for the organization.

The expense of hiring Not So Good employees is huge. A method to calculate this expense is to look at what is termed the Average Profit Per Employee. For demonstration purposes, let's assume that the average profit per employee is $100,000. Remember that this example does not take into account the differences in jobs and salaries, but we can still make a good point.

Now consider that your Best performing employees produce at an average of 20% more than your Second Best or middle category, resulting in average profit per employee of $120,000.

Next, assume your Not So Good employees are 20% less productive than your Second Best, this means they will produce an average per employee profit of $80,000. This is $40,000 less than the average per employee profit your Best employee category delivered.

This means that for each Not So Good employee you replace with a Best employee, your organization would make an additional profit of $40,000. If this were your organization, you would realize an additional profit of $400,000 for 10 employees and $4 million by replacing 100 Not So Good employees.

Looking at the results of our demonstration, it is quite easy to endorse the implementation of hiring only candidates who fit the top third category. Making this happen will not or is not an easy strategy to execute. There is no rabbit's hat to pull the Best performers from, no magic bullet that will make it easy to begin hiring more top performers.

You need to know that the Best category of employees looks for jobs in a different manner than the other two categories. This category of employee will often learn about new job openings from a referral from a friend, neighbor or networking with other top performers. So, if your organization has made a decision to hire more Best performing employees, it would be a good business decision to concentrate your recruiting and hiring efforts in the above areas and rely less on job boards for your job candidates.

Should you want to continue using job sites to get additional job candidates it would make great sense to write a number of ads you think will appeal to the Best category of job candidates. Include such areas as potential for career advancement, opportunity to meet new challenges and to have an immediate impact on the organization's success. See which ad consistently attracts the candidates who become your Best performers.

The Best category of employees is typically looking to build a career and this may well be the main reason for their delivering top performance on a consistent basis. These candidates are in search of more information and the need to ask more questions in the hiring process in their quest to find a career. Their needs are in stark contrast to the Not So Good candidates who are simply looking for a job with a paycheck.

So, your organization needs to be mindful not to rush into job postings that are quite frankly, boring. Hiring the Best category of employees is more than just job postings, the interview or interviews. Take some time; build a solid hiring system that gives the Best category candidates a process that will allow them to prove they are a Best candidate.

Most hiring mistakes occur when we use only interviews to make our hiring decision. Yes, I know that structured, behavioral based interviews are all the rage in HR circles, but no one is talking about how candidates prepare for these interviews. You may not want to believe me, but the candidates often go the book stores for books like, "The 100 Best Answers to the 100 Toughest Interview Questions in their attempt to win you over and get the job.

What are you to do? Use an assessment like 51% of the successful, top performing organizations are doing during their hiring process. Compare your candidates to a validated and predictive success profile or use a well-developed competency model to help you determine if the candidate has the potential to be in the Best category of employee for your organization.

A well designed, validated assessment provides the most objective look you will get for every job candidate during your hiring process. Everything else is subjective and when you are investing tens of thousands, even hundreds of thousands in salaries and benefits for each employee in your organization, it is important to bring some objectivity to your hiring process.

You and your organization should make hiring into your Best category a goal for every department. You must do this if you desire to increase the talent within your organization, while increasing your Return on Investment per employee.

January 7, 2007
Poor performing salespeople have a huge impact on an organization’s profits.

 Why are a small percentage of your salespeople generating most of your organization’s sales?

1. What sets your top performing salespeople apart from mediocre and poor performers in your organization?
2. How can you stop being fooled by “dud” candidates when you are hiring?
3. What can you do to help your struggling salespeople make an improvement in their performance?

 Does the 80/20, 75/25 or even the 90/10 rule live in your sales organization?

 There are valid reasons why sales performance can vary so much.

 If anyone can learn to be competent in any role, then you would have to assume that anyone should be able to sell. Sadly, that is what is being espoused by many sales books, CD’s and training programs. The idea is that if someone will invest the time to read the books, listen to the CD’s and attends training programs he/she will succeed in the business of sales.

 This is simply not the case, is it?

 Consider all the salespeople you know personally. How many of them are struggling to make their quota or are missing it by a mile?

 1.             Is their lack of sales due to the economy? (With other salespeople making or exceeding their quotas      using the economy isn’t much of an excuse.)

2.             Is it because they don’t work hard enough?

3.             Is it because they are not as knowledgeable?

4.             Is it because they need to improve their selling skills?

5.             Or do they need more coaching from their sales manager?

 Here’s an interesting piece of information from the authors of How to Hire and Develop Your Next Top Performer. “55% of the people earning their living in sales should be doing something else.”

 Over 50% of the people in sales are not going to make it in the business of selling.

 What is the cause of all these people failing in sales?

 The biggest reason is that sales managers make their hiring decisions based on subjective information only. Consider the resume and the interview in the hiring process; they almost totally consist of subjective information.

 I call the resume the second greatest story ever told. It is written to impress the reader, with lots of fluff and many times with less than truthful information.

A candidate’s goal during the interview is to put his/her best foot forward, to make the best impression possible. The day of the interview is probably the best the candidate will ever look.

 hat do poor hiring decisions really cost your organization in terms of recruiting and training costs, benefits that include healthcare, salaries and expense accounts paid to poor performers for few sales and lost sales due to poor performance?. This lost money is not “monopoly money,” it is money to grow your business and increase your profits. If you have P&L responsibility for your organization, the imbedded line item costs when added up will scare even the seasoned corporate officer.

 Our sales assessment is a predictive and well validated sales selection assessment. It indicates a candidate’s probability of performing in the top half of the sales organization based on earned compensation.

 I don’t know of a sales manager who would not want to increase his/her organization’s sales. 

Want to increase sales in 2011 in your organization? Our sales assessment can help!

 Below is one typical example of studies done across several different business models that demonstrate that our sales assessment identifies sales candidates with the potential to be in an organization’s top 50% based on earned compensation.

 A validation study conducted for a major insurance company demonstrated that top scorers had sales that were double ($409,189) or nearly double ($340,423) the sales of bottom performers ($228,776).

Over the course of my career in sales management, I have made hiring decisions involving sales and management personnel. I have hired without good information and with good information. My best hiring decisions were always made because I had good information.

 You can begin to make more informed hiring decisions, resulting in hiring more top performers for your organization by simply getting more objective information using a well validated and predictive sales assessment.

In today's litigious business environment organizations want to know that the tests they are using in their selection process are legal.

Your answer is, yes, job-relevant, validated employment tests are a fast, fair, accurate, and legal means to better selection, placement, and promotion decisions. The better the match between a person's personality traits, skills, knowledge, abilities, and attitudes, and the requirements for the job, the more likely the person in that job will work productively and successfully. The proper use of employment tests is good for the employer and good for the employee or applicant. There are two legal criteria that employment tests must meet. Employment tests must be (1) properly validated, and (2) job-relevant. If they meet these criteria, then it is legal to use them.

What does it mean when we say a test is "job relevant?"

It means that here must be a demonstrable link between what the employment test measures and what the job requires. This means that the test publisher is responsible for making sure that the employment test measures the skill or attitude that it is designed to measure, through a process called validation, and the company that uses an employment test is responsible for making sure that the job description demonstrates the need for behavior or attitudes that the employment test measures.

Many test vendors say that they believe in construct validity. Still others will offer up that they prefer criterion validity as the best method. You will often hear a vendor say that good business sense suggests that concurrent validation on a group of people in your organization is the best approach. Their concurrent study is done by benchmarking as few as 3 to 10 employees in a job.

This approach is questionable at best!

It is Important to Know That Correlation is Not Causation
 
Suppose a well known magazine published a nice twenty-question hiring test. Furthermore, suppose your prospect or client gave that test to their high producers and averaged their scores. Is that validation?

Correlation means there is an association between two variables, for example, high producers tend to be good talkers. But correlation is not enough. Test developers and publishers need to find Causation. Does being a good talker cause high production (causation)? Or do high producers tend to be good talkers (correlation)? Your prospect or client should toss all of their tests in the closet unless they know, for CERTAIN, that the content they test for causes productivity.

Styles as measured by the MBTI, DISC, Enneagram, Social Styles, and so forth, might occur more often among certain job holders, but life is too complex to assume style causes productivity. This is critical to remember because, while hiring managers might embrace an intuitively attractive test today, if is does not predict performance, it WILL FAIL over time.

Organizations need to know that "what is measured" equals "on-the-job performance." Remember that blue eyes and blond hair might be correlated, but one does not cause the other.

Validation is the means of determining whether a test accurately predicts job performance, not simply identifying common personality traits.

Validity is not supposed to be some risky venture to determine if something or anything correlates with job performance. It is supposed to be validation.

The Guidelines to prove this are clear. They suggest using either Content (competencies - the nature of the job) or Criterion (performance on the job) validation, not benchmarking.

An acceptable process of validation is explained in the nearly 4,000 words in the Uniform Guidelines on Employee Selection Procedures. These guidelines include prerequisites for conducting a job analysis that include fairness, representative samples, personality traits, critical knowledge, skills and abilities, statistical sampling, statistical procedures, and other important criteria.

It is important to understand that even people with "the right" personality traits can fail in the job because they have the wrong skills.

Here's where it pays to use your common sense. Don't you think that if you could identify the "high performers," it is likely they would have different personalities?

If a test is really valid, wouldn't it be nice to know whether the candidate's test results were significantly different from the low group or that the candidate's results were statistically similar to the top performers in the validation study?

What Do "Validation" and "Reliability" Mean with Regard to Employment Tests?

 "Validity" refers to how well an employment test measures what it is supposed to measure. A validation study is a systematic gathering of data and information to support a claim that an employment test is valid, or (in other words) that it measures what it says it measures.

"Reliability" refers to the consistency in performance of an employment test: does it measure the same knowledge, skill, or ability every time it is used?

Employment tests should be carefully documented so that people and companies that want to use them can examine the way they were developed and validated, and for what purpose they are intended.

There are professional guidelines and standards for how an employment test is validated. The U.S. Equal Employment Opportunity Commission publishes Uniform Guidelines on Employee Selection Procedures that includes standards that a proper validation study should meet. This does not mean that EEOC "approves" a validation study or an employment test. The EEOC does not review, approve, or give stamp of approval to specific tests.

The American Psychological Association has published Standards for Educational and Psychological Testing that serve as guidelines for psychologists to use in the development and use of tests. These standards do not have the force of law, but psychologists who are involved in the development and use of employment tests should be thoroughly familiar with them.

Validation of the Assessment

For example: a vendor may say that in a national survey conducted on salespeople and earned commissions, that there is at best a weak correlation between profile scores and commissions earned. Scores obtained on a national level would be unsatisfactory predictors of commissions earned."

What assessment users should know is that it is important to know that sales commissions are consistently the number one indicator of sales performance, and if and when a vendor openly admits that their test scores are an unsatisfactory predictor on a national level and you may want to ask yourself why you would want to use this assessment.

Theory of the Test

Start with one simple question. Were the procedures used in validation consistent with generally accepted professional standards such as those described in the "Standards for Educational and Psychological Tests?" A reputable test publisher will generally make such a statement somewhere in its brochures or validity manuals.

Be cautious of any personality test that claims to have been written by a professional, and then immediately tries to lead you to the conclusion that it was professionally developed without referencing any validation or reliability studies. The two concepts do not necessarily go hand in hand.

What I would have to really question in relation to such a test would be whether or not the validity studies would meet the requirements of the "Uniform Guidelines on Employee Selection Procedures" as they pertain to the professional standards for validity studies.

Let's say that a company has designed a test that measures communication styles and that the personality assessment is very effective. The validation studies for any assessment instrument are only an objective measure that evidences that the test actually measures what it purports to measure, and in this particular case it is communication styles.

Let's say that this particular personality test is later given certain external modifications so that it can also be sold as a pre-employment assessment. The personality test is still backed by validity studies, but unless new validity studies are done, there are no validity studies to support the use of the assessment for its intended purpose as a pre-employment assessment.  In this example, the intended use is quite clear (to measure communication styles).

The Uniform Guidelines on Employee Selection Procedures specifically state that the evidence of validity and utility of the selection procedure must support its operational use.

Cutting Through the Quagmire

Suppose we accept that 1) Causation is the only way to accurately predict performance and, 2) our Test Content is a pre-cursor to job performance. Our next question is how to prove or validate the test and arrive at good cut-off points. This takes a thorough knowledge of statistics and experimental design.

For example, we have to define what to predict. We have to find "hard" data that is hard to fake, something we know we can trust.

Okay, let's suppose we have the right kind of hard data. What's next? We need to compare test scores with on-the-job performance. We can do this several ways:

1. By giving the test to everyone who applies, hiring them all, waiting until we get performance data and comparing test scores with job performance.

2. By giving the test to people already in the job and comparing test scores with job performance.

Of course we'll need to correct for "restriction of range," that is, the people who are IN the job will be more similar than people who APPLY for the job. So what? Well, for one thing, we might not see the same kind of big differences between high and low producers that we would see between applicants.

For example, we might find there is very little difference in skill between the top 10 in the NBA and the bottom 10. On the other hand, we would probably find a very large difference between the top 10 spectators and the bottom 10.

Flawed decision-making in hiring leads to misguided job standards, using tests that are not validated properly, hiring the wrong people, and rejecting the right ones. It is a major reason why Congress passed the Civil Rights Act and the Department of Labor wrote the 1978 Uniform Guidelines on Employee Selection Procedures.

Tests Add Consistency and Uniformity to the Hiring Process

Employment tests ask the same questions, in the same order, every time. They are scored and the results are presented in exactly the same way. This sameness lets the employer focus on the applicant's responses. Even the best interviewer can have a bad day and forget to ask all the questions of each candidate. Tests don't have bad days.

Tests Save Your Prospect or Client Valuable Time

Applicants can answer hundreds of test questions without taking up an interviewer's time.  Employment tests use the applicant's time, not the company's time. When there are many candidates for the same position, tests help an employer narrow the number of people who will be considered to those who meet certain job requirements -- and do so in a time- and cost-effective way.

Tests Demonstrate Respect for the Applicant or Employee

Employment tests give each applicant an opportunity to demonstrate their job-relevant skills or attitudes in a fair, unbiased way. Giving all applicants and employees this same opportunity is a demonstration of fair-mindedness and respect on the company's part.

Tests Help Your Prospects and Clients Avoid Bias in Hiring Procedures

There are two kinds of bias that should be considered. The law forbids discrimination, sometimes referred to as bias, in hiring. According to the U.S. employment law as promulgated by the Equal Employment Opportunity Commission, all aspects of the hiring process, such as interviews, application forms, reference checks, background investigations, physical examinations, drug testing, job-relevant tests, etc., are to be fair and not biased against any individual or group.

A second kind of bias arises from the natural human tendency to allow impressions, pre-conceived notions, and variations in interpretation to affect decisions and actions. This is almost always an unconscious, unintentional bias on an interviewer's part in the hiring process.

The best way to guard against the second kind of bias exerting an unintended influence during the hiring process is to rely on procedures and tools that are objective and consistent. Properly validated employment tests that are job-relevant help companies avoid the influence of the second kind of bias in the hiring process. There is usually no such evidence that can be shown to support the idea that the interview, reference checks, or any other part of the hiring process is equally fair and unbiased.

When your prospects and clients are considering using assessments for selecting employees here are seven red flags that they should think about before making their decision.

One shot artist? – Potential users of assessments should be concerned if the vendor is offering only one type of assessment. There may be a situation where it might be alright, but when the goal is predicting performance accurately, this typically necessitates the use of different types of assessments. So, if a vendor offers only one assessment and proposes that assessment for use in every selection position, you should become concerned. It hardly ever works that way!

Working together? - Every situation is unique and vendors who approach your situation without a willingness to compromise to account for your needs should cause some concern. Of course there are some things that they cannot change, but a vendor defending their way of doing things down your throat is a sure sign of impending doom.

Have they got game? – Ask how many I/O Psychologists the vendor has on staff. Who build the assessments and their respective output? Who makes certain the assessments meet important EEOC, ADA and APA guidelines? Who is there to answer tough questions and do they come up with constructive solutions to problems that may arise? You need to make certain that the assessment vendor you select has the intellectual horsepower and experience you need to ensure the success of your project.

Service without a smile? - There are vendors in the marketplace who have not figured out the importance of customer service. Developing an understanding of and using assessments appropriately are important to the success of your use of assessments. The ability to access the professional services, account management and having your assessment system operating properly will call for a good relationship with your vendor. There will probably be situations that lead to your vendor going the extra mile without complaining about it. It can be quite easy to spot signs of how a vendor will provide good or bad customer service from the first time you meet with a prospective vendor. It is helpful it you Focus on their overall attitude and listen carefully to what they say.

Prove it to me – What type of validation studies, technical manuals, reports and other helpful information does the vendor have to demonstrate that their products and services are valid, predictive and/or measure the right competencies? When the vendor conducts a validation study do they create technical documentation for you as part of their services? If you are not provide this type of documentation you could find yourself in hot water trying to defend an assessment without sound information.

Does it deliver results? – What studies has the vendor conducted that demonstrates ROI and the usefulness of their assessments? Do they have case studies to back-up their claims? Will they allow you to contact other clients as references?

Stop the BS – If your prospective vendor(s) are inundating you with their marketing BS, beware! Many vendors in the assessment arena are saying the same things. Look for an assessment vendor who is a straight shooter. Look for a vendor with a track record that doesn’t use a load of BS when working with you that means absolutely nothing. Insist that vendors give you the real story about what their products can and can’t do and approach them with a healthy dose of skepticism.

Even with using the information outlined above, the task of selecting the best assessment vendor for your organization’s needs will still be a challenge. In today’s litigious society the technical elements of an assessment are extremely important and should not be taken lightly. It pays to work with a vendor with assessment experience who understands assessments well to ensure your success in using assessments. The ages old adage, “Buyer Beware” definitely applies in the world of assessments.