Past performance cannot predict future performance

Yogi Berra once said, “the future is not what it used to be.”

While I’ll be the first to admit that quoting Yogi for the sake of wisdom may lack credibility, this particular quote is quite relevant and meaningful today, especially for hiring managers, business owners, boards of directors, and anyone who be in a position to hire. or promote an employee.

Until recently, many employees were hired and promoted based on a simple theory: past performance is a good predictor of future performance.

When the world was more predictable and change happened in decades rather than days or even minutes, past performance could be expected to lead to future success. That premise was based on a future environment that would be similar to the one before.

In today’s world, that assumption is incorrect. Predicting performance based on the past is dubious at best and often disastrous. Just read the headlines about failed executives, financial gurus, and business superstars who crashed and burned, and it becomes clear that past success is no guarantee of future performance. What worked in the past could be the recipe for failure in the future.

Hiring or promotion in past performance jobs if the environment in which the employee is expected to perform remains constant. In today’s world, you would have to be doing business in a cave located in a remote part of the world that is cut off from all communication to do that. What business is not affected in some way by the economy, technology, consumer behavior, demographics, government regulations, globalization, etc.?

For every small change in the environment, past performance becomes less of a valid predictor of future performance. Even a small change in individual compensation (either more or less) affects how an individual may value the job or opportunity and consequently enhance or tarnish performance.

And few jobs are getting easier. The responsibilities are more complex. Change is happening at a faster pace. All employees are being asked to make difficult decisions under increasing pressure faster. Often the employee is overwhelmed by the influx of information. Other times you are asked to make quick decisions with inadequate, inaccurate or paradoxical information. He or she is expected to not only keep up to date, but to differentiate between fact and fiction. Decisions often need to be made on the spot before all the information can be processed or even available. We live in a time of unprecedented change, ambiguity, and paradox that almost nullifies any confidence in past performance for employee selection.

Past performance as a predictor of future performance no longer works. Hiring managers, the board of directors, and small business owners make terrible and costly mistakes by relying on the past to move forward.

The new formula for predicting future performance is this:

Past performance + Capacity + Potential = Future performance

Relying on past performance to predict future success can be as much a predictor of failure as it is the crystal ball to see how future success pans out. It is no longer the experience or education that matters, but the skills and abilities that the individual used and developed during the experience that count. What are the transferable skills that this employee developed and now possesses that can be applied to new situations and during challenging circumstances?

In addition to these abilities (often referred to as competencies), general mental abilities must be considered. If the complexity and pace requirements for a new role are more intense (which is often the case), the employee will need to rely more on excess mental, emotional, and physical capacity than in the past.

What does this mean for hiring managers, managers and directors?

Resumes are less relevant than ever. Where the candidate or employee has been and what they have done are no longer valid predictors of where they are headed in the future.

Behavioral interviews have gotten much more difficult. It is well documented that the traditional interview is no longer a reliable tool for predicting performance. There are too many variables, including lack of training by managers and preparation of candidates. It has become more the rule than the exception that candidates spend more time preparing for interviews and managers preparing for interviews.

What counts are skills and potential. Previous experience in the same industry or an education from one of the best schools are no longer tickets to success. From the hiring ad to performance management, you need to laser-focus on recruiting and developing core competencies that lead to reliable and sustainable success. These skills—problem solving, analytical thinking, leading others, planning, and organizing—are job, company, or even industry specific. They are transferable to any task, project or environment. The technical knowledge is still relevant, but it simply creates a baseline for the discussion. How and whether the knowledge can be applied in the future is what hiring managers need to figure out.

We recommend a balanced approach to selection to our clients. The formula is simple:

1/3 experience/education + 1/3 interview + 1/3 psychometric evaluation = job fit

where the resume and interview will help you with the critical KSAs (knowledge, skills, and abilities) that the individual used in their previous experiences. Psychometric tests then play a dual role in evaluating candidates: (1) it is the individual’s innate talent consistent with his or her past success that can give insight into whether it can be repeated (or was he or she simply in the right place in the right time)? time)? (2) what is the potential and ability of this individual to apply and develop these skills to meet future demand.

Relying on past performance as a predictor of future success is a ticking time bomb. It is no longer the path or the result that matters as much as the decisions made and the knowledge gained during the experience that count. The bar has been raised to hire and promote qualified people.

Is your organization ready?
Copyright (c) 2009 Successful Performance Solutions