Amazon’s hiring practices recently had a spotlight moment after a partner at the startup incubator, Y Combinator, tweeted about it. Their guiding principles for hiring are pulled from Amazon’s 1998 shareholder letter, in which Bezos argues that “setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.”
Principles, according to Bezos, that are still in use today. Hiring top talent, he writes, is based on three questions.
Will you admire this person?
Will this person raise the average level of effectiveness of the group they’re entering?
Along what dimension might this person be a superstar?
I suspect the reason Bezos’s hiring principles resonated is companies have a hard time hiring. How, then, can a simple set of such subjective questions lead to hiring better candidates?
Information Asymmetry In Traditional Hiring
Traditional hiring is a complicated practice built on assessing a candidate based on credentials. The economist Michael Spence described this concept in his work on Signaling Theory, for which he won the Nobel Prize. In short, the model posits that a candidate acquires credentials, like education, to signal to the employer that they are qualified for the job. The candidate uses a series of signals to impart to the employer that they are in possession of the right skill set and attributes.
Traditional hiring relies on signals to bridge the information gap between the employer and candidate. Interview questions are designed to discuss the candidate’s education and past experience as an indication of future performance. As you might know from the experience, this method is not foolproof. Spence’s Signaling Theory cites that there are both good and bad candidates, but identifying which is which is not feasible based on signals. Employers take this risk because signals can increase the probability of landing a good candidate over a bad one.
What the employer wants to know is whether the candidate in question will excel in a role at the company. What the employee wants is the job. The two parties are acting with very different goals in mind. The optimal solution for the employer, then, is not information gathering in an attempt to close the information gap. The candidate will almost always ensure there is information asymmetry.
Bezos’s principles prove to be a much more effective system for hiring than traditional practices.
Hiring A Whole Person
Bezos’s questions don’t focus on signals; the focus is on the candidate’s motivation behind achieving those signals. His questions place a premium not only on uncovering a person’s accomplishments but also on what drove that person to achieve. It builds a view not of a two-dimensional candidate, but of a three-dimensional person.
The questions are rightfully subjective. And the magic in those questions is the recognition that each candidate is unique. It brings the candidate to life. Admiration is based on much more than credentials. There are plenty of credentialed people I would happily never see again. It’s the credentialed people with exceptional character traits who are admired. What kind of person does the candidate strive to be beyond their resume?
The same can be said about employees who raise the average level of effectiveness of a group. Most people want to be recognized as great at what they do. But some people define that as being the smartest among a group of duds. Others correctly recognize that the success of their team and those in their immediate surrounding serves as a better reflection.
As colleagues, you spend so much time together you inevitably regress to the mean. The company’s job, then, is to continuously raise that mean. Traditional hiring is concerned with sussing out a candidate’s weaknesses. But the bar is raised by adding a member with outsized strengths.
People can have the same accomplishments but with wildly different motivations. Credentials may be the most visible, but the motivation is the root that built the tree. What an employer needs to uncover is not what school a candidate went to but what makes them tick? What motivates them and why? It’s their uniqueness, after all, that will define that company’s future.
Follow Stephanie Denning on Twitter: @stephdenning
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