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November 23rd, 2011

By Ev in: Building Your Candidate Pipeline, Interviewing, Reference Checks

Review of Topgrading: How to Hire, Coach and Keep A Players


What’s Topgrading, and why should I care?

Christ Church, Old City, Philadelphia

Went for a walk to pick up some food in Old City, Philadelphia with Nick of Factor Media, a fellow entrepreneur who works out of the same co-working space that I do – IndyHall.org.  We started talking about the challenges of finding and hiring the right people.  He shared about this Topgrading approach to hiring that he has adopted for his company.

He loaned me Topgrading: How to Hire, Coach and Keep A Players by Brad and Geoff Smart, which contains some must-use hiring practices.

Fill every position in your organization with an A player from the top down.

Brad and Geoff Smart define A players as the top 10% of talent at a given salary level.  So if you’re paying a customer service representative a salary of $40K, you might as well hire the top customer service representative you can for $40K/year, instead of settling for a mediocre $40k/year one.

They convincingly explain the cost of employing B and C players.  You have to look at the difference between the value an A player can bring to your business vs. the cost of employing a B and C player who you will most likely have to replace.  They estimated that the true cost of hiring B and C players is around 15 times the base salary.  So you hire a weak $40K/year customer service rep and the true cost of that hire is really $600K ($40K * 15)!

Past performance is the best predictor of future performance.

Next the Smart brothers lay out a rigorous screening, interview, and reference check process that picks a part a candidate’s education and work history to reveal performance patterns, which help you predict how they’ll perform the future.

During the screening process, Topgrading requires each candidate to account for every position they’ve had since starting to work full time with exact start and end dates, compensation history, names and titles of each boss.  During the screening interview, they recommend having the candidate identify what their strengths and weaknesses were for each of their last 5 positions, and rate their last 5 bosses.

For the in-person Topgrading interview, you’d dig deeper into the candidates past performance asking the candidate to tell you about accomplishments, failures, mistakes, and what they learned at every point in their education and job history.  This gets past their pat answers: the one accomplishment that they’re most proud of, and that one weakness that seems to afflict every candidate: I’m too much of a perfectionist!

For reference checks, the Topgrading philosophy is, “No reference check, no job offer!”  Secondly, you tell the candidate who you want to talk to: three of their past bosses.  Thirdly, ask the candidate to help setup the reference check interviews.

The Smart brothers make the case that A players most likely left on decent terms and have maintained professional relationships with previous bosses, and will be willing to reach out to them even if they haven’t stayed in touch.

Always be recruiting and re-recruiting.

Topgrading calls it building your virtual bench of A talent, while Erik Herrenkohl in How to Hire A-Players calls it building your farm team.  Either way, you want to be continuously meeting with, interviewing, and staying in touch with A players or potential A players so you have your own homegrown talent pool to tap into when a position opens up.

The Smart brothers also emphasize re-recruiting or being very intentional in retaining your A players by constantly assessing your team and keeping them challenged, happy, and engaged.

For more on building your own candidate pool of A players, check out Hire People You Actually Know? Brilliant!

And have a great Thanksgiving, and just worry about enjoying good food, family, and friends, instead of hiring!

Everett Reiss
email not a hyperlink to protect from spam
@down2thehire

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3 Responses to “Review of Topgrading: How to Hire, Coach and Keep A Players”

  1. By John G on November 23rd, 2011

    Thanks for the good synopsis on “Topgrading”, Ev. While I agree with the basic premise – hire “top performers” – I think most people would – I haven’t seen this practiced very well, personally. Everyone thinks they’re an “A” performer and we know this just can’t be the case. And, everyone thinks they’re hiring “A” performers, and once again, we know this isn’t the case as well. What’s missing here?

    As I think about this, I think the primary failing is in the basis for establishing the top performers – an effective performance management system that is rigorously and objectively implemented by all managers at ALL levels.

    If we don’t really know what the performance requirements are, how can we ever hope to identify top performers? Simple answer – we can’t. We end up basing our hiring decisions on subjective and irrelevant factors and then, worse yet, we start labeling employees “A, B or C players” effectively turning the rating system into a massive, politically-driven popularity contest.

    Another concern that I have with this approach is the tendency to treat people as grades of “meat” that are either retained and promoted or thrown out. It’s no wonder that many employees are insecure in their jobs these days! Increasingly companys’ hiring and performance management systems more closely resemble a game of Survivor. Performance management isn’t just about identifying the A players, it’s about helping the B’s & C’s become A’s and B’s as well.

    So, while the concept of “hire the best” based on historical performance is solid, the practice is quite another thing.

  2. By Nick Eubanks on November 23rd, 2011

    @John

    The point of Topgrading beyond, ‘only hire A players,’ also focuses on the idea of redeployment. A ‘B player’ in one role may be an ‘A player’ in another, or perhaps they are simply a B player for their current level of compensation – and would be an ‘A player’ if being evaluated at a slightly lower level, of both responsibility and compensation.

    It also do not agree with the concept that “everyone thinks they’re hiring “A” performers,” since in my experience many managers out there have no idea what an ‘A Player’ even is – let alone the wherewithal to identify, hire, and properly on-board them.

    We implemented Topgrading at my company about 5 months ago, and while our rigorous screening and interview process is time consuming and take a lot of energy and attention from senior management – the key hires we have made have been true performers, and we have yet to replace an employee whose made it all the way through our Topgrading evaluation.

    Lastly, if you are unaware of what your performance requirements are, i.e. you’re KPI’s and OKR’s have not been clearly defined, you’re in no position to be hiring for the role in the first place. Only once you know what strengths and personality attributes will create a fit for the role can you gauge acceptable past performance as an indicator for potential future performance.

  3. By Topgrading: The Only Way to Run a Start-Up, or Any Company for That MatterFactor Media | Factor Media on November 23rd, 2011

    [...] in this post by fellow Indy Haller and Founder of DowntoTheHire.com, Everett Reiss in his Review of Topgrading: How to Hire, Coach and Keep A Players, he hits on one of the key points of Topgrading which is to fill each level of the organization [...]

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