how to avoid hiring toxic employees

Some of the most dangerous employees are the entitled ones who

play for themselves at the expense of the team

can’t walk the walk

threaten to sue

refuse to be held accountable

What data points would you advise looking at (assuming you could ask/see anything) to make a determination if this person is gonna be a prima donna?

generally speaking, due diligence is the best way to avoid toxic employees. Unless you are hiring someone super green, if they have say 3-5+ years of experience, good diligence like asking their closest boss/co-workers/clients, checking court cases for employee suits, etc. will get you a decent answer.

There’s always a chance they turn out to be a psycho anyway, but that’s the dice you have to roll

Intuition.

That is the only tool. It always amazes me these “check the boxes” processes. Obviously psychos will have made sure all the boxes can easily be checked. So that you can easily justify hiring them, and then everyone will suffer for years as you try to get them out of the company.

Yet anyone with basic sense can tell the person is a bad apple from the first meeting.

Intuition sometimes picks up on stuff, but it can miss things too. Particularly, high-performing sociopaths often know how to charm and smooth initial encounters until they can nestle into a position where it becomes costly to remove them, and then they can let go.

It’s fun to complain about box-checkers, but checklists have an important use. What’s wrong with box checkers is that they think their job is done after checking off boxes, or that an unticked box tells you all you need to know.

Michael Mauboussin talked about Checklists in his book Think Twice and he was a fan of them for investment processes. It’s a bit off topic, but it’s still pretty interesting to think through the typology of checklists:

He borrowed from someone else’s work and said there were basically two types:

Do-Confirm Checklists : These are for complex things you do regularly. They are there to make sure that in what may be a long process, you’ve covered all the bases your process requries. It also helps keep you from being distracted by one key feature or failing to the extent that you forget or disregard the rest of a process. Airline pilots going through the pre-flight instruments check are a useful example of a Do-Confirm checklist. There’s a lot of stuff, so it helps to make sure nothing’s been forgotten.

Read-Do Checklists : These are for important situations that come up rarely, so you might not remember the best procedure off of the top of your head. Think about a nuclear power plant shutdown… what stuff needs to be turned off and in what order. The operators presumably don’t need to do it that often, and there may be emotional panic involved if it’s an emergency, so you have the Read-Do checklist to ensure it’s done right.

(More good stuff on Checklists: https://hurricanecapital.wordpress.com/2016/07/12/think-twice-checklists/ )

The box ticking is precisely to avoid this kind of thing; the problem is that box ticking shouldn’t be the only thing people do.

Box ticking likely does get rid of a lot of toxic candidates, but high-functioning problematic folks can still get through. That’s part of what makes them high-performing. Part of the challenge is that what features the checklists call for can become mismatched with generational changes, I guess.

Having a thorough interview process helps, where you try to expose them to different situations to see if they respond in a way you’d expect from a potential recruit.

We once had two junior associates interview a senior consultant, and made sure to grill her about technical skillsets. Not only did she fail the test (which was expected), but her overall attitude was pretty alarming. She felt like she was too good to be interviewed by associates, and felt like the questions didn’t do justice to her experience. This exposed a typical prima donna who likes to boss people around, knows less than they should, can’t work with junior level staff, and deals poorly with unfamiliar situations - everything an employer doesn’t want.

Lots of these trouble makers in CEO/CFO positions too.

You meet them, it’s immediately clear they fit the above description, then the decision makers hire them anyhow after lots of “box checking”, and they proceed to destroy the company.

^ because thats how McKinsey/Deloitte/GS & HBS trained all of them. They all came from similar backgrounds, and think the same way. Then people wonder why the same results continue. Never understood when shareholders boot out the guy who started the company to put in one of these clone professional managers. The companies nearly always lose value.

At the most extreme, look at the Trump phenomenon.

Americans arguing for a year now, about every little check box, trying to do quantitative analysis on Trump. It took me 50 milliseconds to know with intuition he is a narcissistic psychopath, completely unfit for leadership of any kind.

What was the test? Was it made extremely difficult on purpose to show how the interviewee would react? What would have been the proper reaction?

Not true at all.

Says one of the bad apples.

No, it’s hard to tell. In fact, from my experience, the really good employees might not do well at interviews, because they are modest and are sometimes bad at promoting their achievements. The egotistical candidates are better at quantifying what they did, since they have spent a lot of time thinking about why they are so great. Filtering out modesty from lack of achievements is tricky and at the very least, requires deep experience in the industry.

It is very hard, if not impossible, to form an accurate opinion based on a 1 hour interview session. That is why personal references for experienced hires are extremely important. If you are hiring 5 analysts in your yearly program, risk is mitigated, since you can push the bad ones away over time and keep the good ones. However, if you are hiring a VP level or higher as a one time thing, due diligence is crucial.

^troof

#freeCvM

Intuition is not evenly distributed, some of us have more.

I can tell in seconds.

I do not believe the employees - unless they are spoilt brats who need no paycheck - are toxic if treated decently. If a company is committed to securing a fair-play, long-term workplace, people hold on to that company. However, the small, forever-start-ups who treat highly qualified people like disposable waste - hiring and firing at will and without relation to performance - deserve to be put into their places when the discriminatory situation arises. Sorry for the alternative opinion.

I guess we know who not to hire off this forum.

Employer treatment certainly helps. Everyone wants to be treated fairly.

From my experience, one of the major employee issues in this line of work is that everyone thinks that they are top of the pile in terms of work quality. So, it is hard for the 50 percentile worker in a selective job to accept that the 90 percentile guy is just better than him. Instead, the higher bonus and evaluation of this person is sometimes viewed as favoritism and creates a bad work dynamic eventually. I suppose this is why IB and other intakes tend to “bucket” groups of people and standardize compensation.

Of course, I don’t know if this in avoidable completely through employee selection. High energy individuals are requires to do a lot of finance work, and disappointment is inevitable.

This is certainly true.

Years ago I worked for someone who shattered everyone’s illusion. She happened to be a raging psychopath (an actual one) and the scariest finance person I’ve ever met, BUT I really did love the following aspect of her behavior. She took all these people who had been told their whole life that they were “on top of the pile” and coldly informed them “your work is substandard”. She would review work 30+ times, over and over, until these losers either turned in TRUE top quality work, or quit in a rage of frustration. She would accept nothing less, no weaseling out because you went to this school, or knew this person, either flawless work quality , or GTFO. It was hilarious to watch, little miss CFA (who couldn’t calc NPV) broke down in tears and quit.

And she obviously fit into the category of trouble employee, I could tell she was a psycho very early on. There is no box to check “not a psycho”, you just have to know it with basic sense. Eventually everyone good quit, leaving a department of losers for her to rip into constantly.

Employee don’t leave the firm, they leave the managers. If your firm has high turnover take a look at the managers first.