Employers regularly hire and promote managers and executives before defining what they need to be doing in their new role to be successful, a new U.S study has suggested.
The research from Right Management Consultants found that four out of 10 companies felt failing adequately to define and evaluate roles critical to successful performance was the number one mistake businesses made when hiring or promoting managers and executives.
The poll of 273 companies found that a similar proportion viewed the coaching, mentoring, and training programmes offered to high-potential employees as inadequate.
Three out of 10 also felt their organisations used overly subjective criteria and unreliable assessment tools to identify and assess high-performing individuals.
More than a quarter (27 per cent) also felt there was too much focus on the basic requirements of the jobs to which people were being hired or promoted – such as managerial and interpersonal skills – and not enough emphasis on less apparent talents, such as morale or team building.
Two out of 10 also felt organisations gave inadequate consideration to people from outside.
"Due to the rising cost of, and negative organizational impact from, bad hiring and promotion decisions, more workplaces are turning to formal assessment processes," said Rick Smith, Right Management Consultants's senior vice president.
"These include online assessment centers that use multiple assessment tools, including workplace simulations, situational judgment, cognitive ability testing, and other approaches," he added.
"Formal assessment methods provide a broader picture of candidates under consideration, more consistency in management development, and people who are the best fit for the challenges of today and tomorrow," he continued. It cost an average of two and a half times an individual's salary to replace an employee who did not work out, including recruitment, training, and severance costs, and lost productivity, according to a survey of 444 organisations throughout North America released by Right Management Consultants earlier this year.
More than four out of 10 organisations in that poll said it cost at least three times the employee's salary.
Lower employee morale and decreased productivity are the biggest consequences of bad hiring and promotion decisions, the current study found.
Other negative consequences of bad hires and promotions included: lost customers and market share and higher training, recruitment, and severance costs, it found.