This weekend, I was replacing my water heater.  Simple job, so I thought.  Even after draining it, it weighed more than I planned.  I lost my balance, stepped through the attic, and put a hole through the ceiling below.  How does this relate to promoting the wrong people?  Unintended consequences…

I didn’t plan to put a hole in my ceiling, but I was doing what I thought was a simple, straightforward job, and stepping through the ceiling was the unintended consequence.  You want to keep the great employees you have meticulously placed in a particular group, but by promoting the wrong person to be the group manager, you may have the unintended consequences of losing great people.

How do you keep from promoting the wrong people?

Companies need to pay closer attention to hiring and promoting the right people the first time according to a survey by OI Partners-The Brighton Group (Bellevue), a global talent management firm. The biggest consequence of hiring or promoting the wrong executives is lower morale, according to 81% of surveyed companies. Other negative impacts of having the wrong executives in place are: lower worker productivity (according to 74%), lost business (53%), and higher employee turnover (48%).

The biggest negative consequences from hiring or promoting the wrong managers are: lower employee morale, cited by 84% of companies; decreased worker productivity (82%), higher employee turnover (59%), and lost business and market share (52%).

Replacing a manager or executive who leaves for another job, or one who turns out to be a bad hire or promotion, can be costly. It costs an average of 2.5 times an executive’s salary, and 2 times a manager’s compensation, to replace them, according to the survey of 262 companies by OI Partners-The Brighton Group. The costs are for recruitment and training of the worker who leaves and the replacement, lost business, and severance pay and benefits.  The replacement costs for a team of workers disillusioned by a new, wrong manager, will be many times the cost of a new manager or executive.

Using the Profile XT (PXT) assessment to rank candidates against a Job Model (also developed by utilizing the Profile XT assessment) provides an objective methodology to help you select and develop candidates for future managerial positions.  It is the old “pay me now or pay me later” approach.  The use of the cost-effective PXT methodology today, pays for itself many times over as compared with spending twice a manager’s compensation (or more) in the future if you select the wrong person.