Monday, February 21, 2011

The employee saga part 1: Hiring the right people

You're only as good as the people you hire. –Ray Kroc


It is important to find and hire people that you believe are honest, passionate about what your company is setting out to achieve, believes in and have the desire to provide customers with great service, and can fit in well with your company’s culture. If you can get the right people on board, the other stuff will start falling into place. I remember reading in Jim Collins’ book “From Good to Great” about how some companies that became really great focused first on hiring good employees, then only on which direction to take the company.

The right people are driven, self-disciplined, take pride in their work and in serving customers, like to step up and make decisions, and conduct themselves with integrity. Employees with these qualities don’t need to be constantly monitored, can be empowered to make decisions and use their judgment in their work, and can be trusted to really perform for your company. It is after all your employees that make your business run, take care of your customers, and create value for your company. They are the ones that are in the best position to make decisions, and it is through their skills, talents, and efforts that real value is unlocked in your business.

Management’s job is to hire these good people, train them and help them grow, create and maintain a culture where they can thrive, cut out bureaucracy, put in place a relevant compensation system, as well as do other things to ensure that  employees are able to perform at a very high level  and drive superior returns for their company.       

To select the right people for our companies, we need to have in place a thorough and well-designed hiring process. It’s important to involve our employees in the hiring process, as they would be in a good position to identify people that would do well in your company. 

According to the book “The New Gold Standard,” The Ritz-Carlton really takes the time to select good people to come work for them and become a part of their family. And because The Ritz-Carlton invested so much time and effort in selecting their employees, the people that do get selected to join the company feel a sense of pride and believe that the company thinks that they are really good and expects a lot out of them, this will drive them to live up to the standards that are expected of them.

Back to the point I made earlier about finding and hiring people that you believe have integrity, are passionate about what your company is doing, and fit in well with your company’s culture. It isn’t enough if your potential employees are smart and have the relevant skills but lack any one of those qualities. If your employees aren’t passionate about what your company is doing, they won’t give it their all for your company.  If your employees can’t be trusted to conduct themselves with integrity, you can’t empower them to take the initiative and make decisions.

Tony Hsieh, the CEO of Zappos once said that “your culture is your brand.” And if you hire people that don’t fit in well with your culture, you are destroying your brand. Imagine that a company has a culture that is very customer oriented, but it starts hiring people that might not necessarily be customer oriented. When that company’s customers come into contact with these people, they will get disappointed with the service and tell their friends about their experience with that company; over time, this can lead to significant impairment of that company’s brand. By hiring people that don’t fit in your company’s culture, not only will these people not thrive in your company, they might damage the culture and bring down your other employees that were doing well in your company.  

We need to think about efficiency when hiring, not only because we can cut costs by needing less people than our competitors to do the exact same jobs that they do, but also because we wouldn’t need to layoff so many people when things get tough, this in turn would result in your employees feeling more secure about their jobs and being more loyal to your company.

We need to have the patience to carefully select our future employees and not just hire anyone because we are short-staffed or something. We also need to fire bad employees as they might demotivate and drag down the good employees that want to work hard.


If you have any questions, or have anything that you would like to share, please feel free to comment. Thank you for reading, and may you always sustain good returns on your portfolio. Take care.