Instead of throwing money at “superstars,” companies should use quantifiable measures to pick the right CEO, according to recent Wharton research.
This article is pure gold, with so many valuable points.. Among them:
The argument for phone interviews:
“The biggest shortcoming of executive recruitment, the researchers say, is the failure to apply “Meehl’s Rule:” Never meet a job candidate until you decide to make them an offer. The late Paul E. Meehl, a psychologist from the University of Minnesota, advised using relevant, quantifiable factors to judge candidates. Instead, height, body build, gender, accent and looks often get considered"
The argument for getting an award (as an employee) vs not believing it when hiring:
“The authors cite a study showing that CEOs who won awards in the press saw a marked increase in pay, while similar CEOs (runners- up for the awards) saw little increase. Three years later, there was a large gulf between what the winners and non-winners earned. However, the stocks of the firms controlled by the “superstars” actually underperformed compared to those of the firms run by the non-winners.”
Looking at job performance in context:
“Executives ... are often held personally responsible for the success or failure of the organizations they represent without consideration of external factors, such as the state of the economy. They point to a study in which CEOs of oil companies that performed strongly were compensated well, despite evidence that the profits resulted from fluctuations in the price of crude oil.”