You’ve heard it many times before – your most important asset in your company is your people. Yet, most companies struggle with hiring and promoting the very best people at every salary level.
This, Bradford Smart suggests, is what separates the highest performing companies from mediocre companies.
He suggests that there are 3 huge problems:
- Dishonestly by weak candidates who get away with lying on their resumes and “faking it” in their interviews;
- Insufficient information uncovered during the interview process that allow candidates to be selective in what they share about themselves;
- Unable to verify what information is uncovered because most reference checks are useless.
Fortunately, there’s a cure, and it’s called Topgrading. Follow this process, and Smart suggests that you’ll quadruple your hiring success and ability to spot and promote high performers.
Join us for the next 10 minutes as we explore the 12 Topgrading Hiring Steps, and how you can use them.
Before we get to the steps, let’s quickly review the top 3 myths about Topgrading so that you don’t accidentally dismiss some of the information below as irrelevant to your business (or skip this summary altogether).
First, Topgrading is not only for big companies. This is a hiring process that can work inside of companies of all shapes and sizes.
Second, Topgrading is not about getting rid of C players. Ideally, Smart suggests, underperformers will fire themselves for failing to accomplish what they committed to.
Third, Topgrading is not about rank and yank. Jack Welch famously had his managers force rank all of their employees each year and fire the bottom 10% of performers. This IS NOT what Topgrading is about.
Now that we’ve covered what Topgrading is not, let’s move on to what Topgrading is.
What Is Topgrading?
Topgrading is about filling at least 75% of the positions in your organization with A Players. You do this by hiring and promoting people who turn out to be high performers at least 75% of the time.
Smart says “at least 75%” because no CEO or manager gets there and says “well, that’s good enough.”
Which brings us to the question of what an A Player actually is.
Smart defines it as “someone in the top 10% of the talent pool available.” B players make up the next 25% of talent available, and C players make up the bottom 65%.
The most important factor when it comes to “availability” is compensation level. Meaning, you want to find the A players for the particular role you are hiring and at the compensation level you are offering.
Rather than paying more for A Players, Smart suggests you focus on getting A Players for every job, with the salary you can afford.
The most important competency of an A Player is resourcefulness, which means they get much more done than B or C players with the same amount of resources available to them. It’s a combination of energy, passion and analytical skills all wrapped up into one.
There are plenty of reasons you should consider following to Topgrading process. Here are a few of them:
- In a team full of Bs and Cs, your A players will spend too much time preventing and fixing problems of low performers;
- Topgrading companies get disproportionately better talent for the money they spend;
- A players are talent magnets.
The Key to Topgrading: The TORC Technique
The key concept that makes the entire Topgrading process work so well is the TORC Technique. It’s your truth serum for interviews.
It stands for Threat of Reference Check, and it lets your candidates know, at each step of the hiring process, that the final step in the process is for them to arrange personal reference calls with their former bosses.
There are two main benefits of this technique.
First, it scares away C players, saving you a lot of time and energy during the interview process.
Second, it ensures that everything they tell you throughout the interview process will be as close to the truth as you are going to get, because they’ll understand that you’ll be fact checking everything they say.
Now that we’ve got that out of the way, let’s move into the steps.
Step #1: Measure your baseline success hiring and promoting people and your costs of mishires
The first step in the Topgrading process is to determine your baseline for hiring success.
Start with the people you’ve hired over the past three years, and then label them a high-performer or a mis-hire.
From there, estimate the % of your past hires that are top performers, and the % of your past hires that you’d classify as mis-hires.
Next, complete the exercise again for the people you’ve promoted over the last few years.
Then, to bring the pain of your hiring mistakes home, calculate the cost of these bad decisions based on the number of hours you’ve wasted on the mis-hires, along with the costs of replacing them. The research Smart has done shows that misfires cause an average of 300 additional hours worked on top of the cost of finding their replacement.
Now that you know the actual costs of poor hiring practices, you’ll be much more likely to do something about it.
Step #2: Create a clear Job Scorecard (not a vague job description)
The next step is to create a Job Scorecard so that everybody knows what A Player performance looks like.
It should include the measurable accountabilities for the first year, the numbers they need to achieve, and the ratings they should achieve in core competencies.
When it comes to the core competencies for the job, Smart suggests that most people list 5-10, when in reality there should be up to 50, especially for management jobs. He also suggests that you should colour code them in the following way, based on how easy they are to change through coaching, training and experience:
- Green = relatively easy to change;
- Yellow = hard, but doable;
- Red = very difficult to change.
This allows you to identify the competencies you absolutely need to see demonstrated before somebody is hired, and determine which competencies can be trained after they are onboard.
Step #3: Recruit from your networks
Now that you have your Job Scorecard, you are ready to start recruiting. The most effective and cost-efficient way to do this is recruit from your networks of high performers that you and your team know personally.
There are two types of networks. The first network is the A Players that you’ve worked with. The second network are the Connectors that you know can introduce you to more A Players.
Smart suggests that every manager on your team build and maintain lists that contain at least 20 A Players and 10 Connectors. In fact, he suggests that this should itself become a Job Scorecard accountability.
To motivate your team to keep on top of it, pay “bounties” when they refer high performers.