Move to competence interviewing

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But people who use questions like these for recruitment purposes are a liability to the organisations they are hiring for, says Michael Greenspan, occupational psychologist with Kiddy and Partners, who trains executives to be more effective interviewers.

'What is the right answer?' he asks. The interviewer who asked the Einstein question apparently thought the pop-star was 'the right answer', because a preference for the scientist would demonstrate a bias for theory against practice.

The author of the sibling question thought you could 'tell a lot about a person' from family position: the interviewer came from a large family.

Interviewing is something that most senior investment bankers and fund managers have to do on a regular basis, notwithstanding the increased use of assessment centres and psychometric tests, particularly for graduate recruits.

In most banks, for lateral hires the cornerstone of the process remains a battery of sometimes rather unfocused interviews with time-pressed potential supervisors and colleagues. At a few US institutions, a candidate may have to endure as many as 70 interviews. Yet most bankers have never received any training in effective interviewing.

Research has been carried out over several decades on the effectiveness of different recruiting methods. Traditional interviews come out consistently poorly, predicting performance in only around 25% of cases. However, this can rise to 50% or higher if a structured, focused approach is adopted.

What is especially interesting, says Greenspan, is that with traditional interviews there is no difference in the effectiveness of people who think they are good interviewers, compared to people who think they aren't.

The problem, he says, is that traditional interviewing relies disproportionately on gut feeling. That leads to people hiring clones of themselves and making decisions based on personal prejudices.

Greenspan says: 'The notion that we can be objective is ludicrous. We all think we're shrewd. But the danger is that we make a decision and then look for evidence to support it and play down other things.'

The third element in this triple whammy of poor practice is selective memory distorting the profile of the candidate one way or another.

Instead, says Ian Tomlinson-Roe, director of KPMG consulting for financial services, interviewers should start by being clear about their objectives: to find out precisely what experience the candidate has and to explore specific skills, competences or behaviours. Skills and behaviours, he says, can broadly be divided into three categories: professional/sector related, technical and interpersonal.

According to consultants, a number of bulge-bracket banks are now using or moving towards what is called 'competence-based interviewing', although few institutions will discuss their HR practices publicly.

However, Fidelity Investments discloses that competence-based interviewing has been the norm for many years and executives are routinely trained in its use.

Recruitment typically involves two sets of interviews, says Donna Burns, Fidelity's head of global staffing. One set deals with cultural issues, 'the Fidelity fit,' she calls it, and the other focuses on the professional and technical side. When it comes to senior candidates, Trevor Beeson, Fidelity development director, says that cultural issues are paramount. The person is likely to have a more easily verifiable professional track record, so if they are going to fail, it will probably be for cultural reasons. 'They have been programmed in other organisations,' he says.

To help establish the cultural fit, Fidelity has defined its core values and attempts systematically to establish whether candidates meet them. For example, it wants people who are comfortable with change. So candidates are probed about situations they have experienced in which the goalposts changed, what they did to adapt, how they coped and what they learnt from the process.

This kind of probing is vital because the best predictor of future performance is past performance, says Greenspan at Kiddy,

In addition to training its managers, Fidelity also gives feedback on their interviewing style and performance from past interviewees. It is part of what Burns calls 'candidate care' that Fidelity's HR department runs. It collates an anonymous survey every six months in which it asks new starters at the company about their experiences of the recruitment process, including the quality of interviewing.

At Erste Bank, the Austrian universal bank, competence-based interviewing has been in place for about a year, at least in the London office. The drive behind it, says personnel manager Karin Rehacek, was the UK's forthcoming Financial Services Markets Act, which will put a strong emphasis on the competence of staff for compliance reasons.

Erste has defined a series of competences and identifies the six most important for each new hire. Senior candidates will have at least three interviews, with two of the competences being probed each time. Interviewers then fill out feedback forms, which go back to Rehacek.

She says that although the formality has made the recruitment process a little slower, it has improved the quality significantly.

She says: 'I get more constructive feedback now. Before, managers would just say a person wasn't suitable, but they couldn't tell me why. Now they will give x,y,z reasons. It's more focused and the end result is better.'

All managers and above now do interview training at Erste, followed up with refresher courses. 'When we set about doing it, people did say 'why do we have to spend a whole day doing this?', but the feedback has been very good,' says Rehacek.

Having a systematic approach to interviewing does require more preparation on the part of the interviewers, but those that do it claim it pays off.

For example, says Greenspan, it allows you to reduce the number of times you need to interview a candidate. He says: 'I would rather see three good one-and-a-half hour interviews, than 40 half-hour ones. Four solid interviews will almost always give you what you need, or six at the most. After that you hit the law of diminishing returns.'