At its core, skills-based hiring promises that people are evaluated based solely on their ability to do the job, not selected based on who they know or where they grew up.
It democratizes work so it is completely meritocracy and not based on nepotism.
For IO psychology, this line of thinking is nothing new and is fully supported.
Before we get into the skills, we need to understand what creates business value. It finally starts with the performance.
All leaders (and individuals) want to do a job well.
Sounds simple enough, but most organizations are not strong in how they define good performance and especially how to measure it accurately. The jobs that are easiest to define are jobs with tracked KPIs.
Think about jobs where you have to produce something or sell something. Goals can be tracked, employees can be monitored based on output and differences in performance between the best employee versus the worst employee, so an organization can identify the difference between hiring and developing a top performer versus a low performer.
Now, let’s take jobs that are more knowledge-based.
There are no clear KPIs to track, but the manager knows who is a high performer and who is not.
The challenge comes when they try to define it.
We’ve also found that you can have two high performers in the same role, but they’re high performers for different reasons (for example, one is a great colleague who gets their work done on time but also spends time helping and guiding others, while the other person doesn’t necessarily help others but does excellent work that sets an example for others).
