All too often, we talk about the quality of hire measured by a new employee’s first performance review. We like to correlate this metric back to the source of hire, business units, recruiters, etc to identify who is doing the best job so we can replicate those results in other parts of the business. The problem is that nobody really knows how to measure quality of hire.
By using the first performance review, we have automatically made this metric useless. The first performance review is well known to have a high positive bias. Based on business unit, geographic region or the individual manager, the degree of this bias will change. First performance rating is basically meaningless if the objective is to compare across the organization. The same goes for the first engagement score. New employees also have a high positive bias towards their new employer and variances exist on the same parameters as the first performance review.
Instead, you want to use the 2-3 year performance and engagement scores. These provide you a more realistic view of what the employee capabilities and attitudes are with minimal recency bias. What this gives us though, is that you can’t simply implement a new source of hire and evaluate the quality of hire from that source six months later. This is a long term metric.
3 responses to “HR Metrics: Quality of Hire”
I agree with your comments. But start the process not with the first performance review – often 6 to 12 months after hire – but with a 3 month mini-survey. Focus on hiring manager satisfaction – Would you hire again? – and Time to Productivity. This latter metric is easier and more objective in some jobs like call centers – # of days before rep is on the phone alone; harder with others. Ask your managers as of what date did their new employee fulfill the basic duties of the position without assistance. Keep it simple. The goal is not to be scientifically correct. Patterns wil emerge that will help you improve your recruiting and onboarding processes and practices.
The typical performance review performed by most companies will not provide enough differentiation between high and low performers, especially those that are tied to compensation/merit increases. A well designed survey conducted at 60, 90 or 120 days post hire (depending on job specific ramp up time) can effectively differentiate high and low performers and help to define quality of hire. The key is to survey the hiring manager at the exact same time for each hire (hire date + X days). This creates an ongoing process that may take awhile to accumulate enough data for an effective view into your quality of hire. I would be careful of measuring quality of hire beyond 6 months of an employee’s hire date. There are too many additional factors that contribute to an employee’s long term performance (training, engagement, relationship with manager, etc.), making it harder to link a long-term quality of hire metric to your selection decision.
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