weeding out toxic assets - omni vie - weeding out toxic...through harrison assessments (www....

36 JUL - SEP 2009 MANAGEMENT

Human Capital

Weeding OutToxic Assets

Beware!Is your company carrying any human liabilities?

by Kevin Tan, MIM-CPT


Human Capital

37JUL - SEP 2009 MANAGEMENT

Human Capital

Research shows that hiring the wrong

person cost companies far more

than the employee’s annual salary, which

is why it’s crucial that companies take the

time and invest in a thorough interview

process using proven assessment tools to

fi nd and match the right candidate for

the job. Hiring the wrong person for the

job is an expensive mistake no company

can afford.

It has been found that employee

turnover can cost the company anything

from 50 percent of a low-skilled hourly

worker’s annual wages plus benefi ts, to

some three to fi ve times the annual salary

and benefi ts of an upper management

position. In other words, if an employee

in the upper management earns

US$50,000 a year, the actual cost to the

company – should this employee be a

wrong fi t for the job or the company – is

actually US$150,000! This is measured

based on lost opportunity cost and the

loss of business, potential customers

and momentum. Furthermore as the

employer, you’re back to square one –

looking for a replacement.

Brad Smart, author of Topgrading: How

Leading Companies Win by Hiring,

Coaching, and Keeping the Best People,

asked managers how much time was

spent on smoothing things over with

irate customers, unruffl ing feathers with

co-workers and support staff, coaching

and mentoring, lost opportunities,

missed goals, performance meetings,

severance packages and other distractions

resulting from hiring the wrong person.

Smart found that the average time

spent working with a mis-hire is 150

hours for an employee earning between

US$90,000 and US$150,000.

The question therefore is: Do you have 150 hours to waste on trying to “fi x” a wrong hire? This question is especially pertinent given

the current global economic scenario.

Now that the fi nancial market has begun

its own reality check, many banks have had

to re-evaluate their balance sheets (assets

and liabilities) and have started to clean

up their books by assessing their “real

assets” and “real worth” and disposing of

what is now known as “toxic assets”.

What are toxic assets?

Since the subprime loans fallout in late

2007, the fi nancial world has come to

learn a new term known as “toxic assets”:

• The term “toxic asset” is a non-

technical term used to describe certain

fi nancial assets when their value has fallen

signifi cantly and when there is no longer

a functioning market for these assets,

such that they cannot be reasonably

sold. This term became common during

the fi nancial crisis that began in August

2007. Toxic assets played a major role

in that crisis. When the market for such

assets ceases to function, it is described as

“frozen”.

• Markets for some toxic assets froze in

2007, and the problem grew signifi cantly

worse in the second half of 2008. Several

factors contributed to the freezing of

toxic asset markets. The value of these

assets became very sensitive to economic

conditions, and increased uncertainty

in these conditions made it diffi cult to

estimate the value of the assets. Banks

and other major fi nancial institutions

were unwilling to sell the assets at

signifi cantly reduced prices, since

lower prices would force them to

signifi cantly reduce their stated assets,

making them appear insolvent.

In human capital terms, toxic assets or

human liabilities are related to the

following:

• Someone who, whether consciously

or subconsciously, disrupts or hinders

the advancement of productivity in the

workplace.

• Also known as “walking liabilities”,

they say things and they do things in

your organisation that make them a

huge liability. Just because you haven’t

been sued for it doesn’t mean they

aren’t walking around creating liability

for you.

In human capital management, where

human capital is one of the largest

investments for any organisation,

human assets are expected to deliver

value through higher productivity,

performance, innovation, knowledge

creation, delighting customers through

memorable experiences and the

achievement of company goals, which

ultimately deliver better company

profi ts, and increase shareholder value

and brand leadership.

To achieve these goals, companies will

have to recruit and hire the right person

for the right job. The right match

must have the right hardware such

as eligibility, education, qualifi cation,

training, cognitive abilities, industry

experience, specifi c job technical

capability combined with the right

“software” such as motivational fi t,

behavioural competencies, preferences,

interests, aptitude and having the right

attitude for the job.

In this article, I will share the

characteristics of “toxic assets” or the

wrong hires, misfi ts for the position,

unproductive employees and low

performers. Using the traits and

behavioural tendencies measured

through Harrison Assessments (www.

harrisonassessments.com) I will also

share some ways in which these “toxic

assets” can be managed.

Identifying “toxic assets” The following are some of the

personalities we’ve all encountered at

one time or another in the course of our

employment:


Human Capital

1) Drama Queen Characteristics: Wants the whole world to

know what’s happening in their lives and

ever ready to share openly the ups and

downs. Quite similar to the emotional

peaks and troughs observed in the

characters of soap operas like Dynasty,

Dallas and The Bold and the Beautiful.

Traits to look out for: These employees are

generally extroverts and highly outgoing.

They have strong and infl ated egos; are

highly frank communicators and direct

to the point, possibly curt and defi nitely

assertive. They are also likely to have a

strong yearn for praise, acceptance and

the feeling of being valued, hence may

also be seen as an attention seeker.

Negative side: They take up a lot of their

own energy and time to be the centre of

attention and cause others to be dragged

into the drama as well. They tend to

make a mountain out of molehill and take

constructive criticism negatively.

How to manage: Drama queens need

to focus on their priorities and manage

performance and have clearly defi ned

milestones set out for them. Last resort

– ignore their theatrics and don’t pay

attention to them.

2) Crowd PleasersCharacteristics: Plays the populist role

naturally, likeable, affable, humorous,

a livewire and life of the party; knows

what and how to say it to the right crowd

at the right time and place.

Traits to look out for: Almost like a drama

queen but this character possesses higher

emotional intelligence (EQ) and is

an effective communicator with good

persuasion skills. In addition, they are

highly outgoing and extroverted, are

able to build rapport quickly, are not

shy, highly empathetic, very helpful,

diplomatic, confident, high self-esteem

and know what to do to gain recognition.

Negative side: Demonstrates inconsistency

between what one commits to and how

one behaves in order to be politically

aligned or correct for that situation.

Locally known as ‘lalang’ (or weed)

bending according to the direction of

the wind.

How to manage: Be specific with their

deliverables and targets. Have very frank

discussions and assign accountability

and explain clearly the consequences

of inability to meet agreed deliverables

or KPIs.

3) Verbal Caustic Characteristics: Steps on others without

even realising it; blunt and caustic;

laser-tongued. Thinks he is just being

honest, does not know he may have

hurt others’ feelings without knowing

it. Insensitive; can be blunt towards

others but cannot take it when others

are blunt towards him.

Traits to look out for: Very frank and highly

assertive; possibly has an infl ated ego.

Has “low diplomatic” and “low helpful”

traits. Has low tolerance towards others

who are blunt.

Negative side: Insensitive. Thinks there

is nothing wrong with own style. Finds

it diffi cult to gain respect from team

members and cannot engage others in

productive discussion. Has the tendency

to say the wrong thing at wrong time.

FLIP – becomes quiet and repressed

under stress.

How to manage: To attend EQ classes and

interpersonal skills. More importantly,

have a counselling session to understand

what has caused this behaviour from early

on in their youth and perhaps cultured

from the job profi le.


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4) Mini NapoleonCharacteristics: Makes decisions with

minimal or no collaboration with other

stakeholders or team members; practises

selective listening. Others will fi nd him

over-bearing, demanding and controlling.

Has a strong need to be in the driver’s

seat. Ultimately, it’s either “my way or

the highway”.

Traits to look out for: Highly authoritative,

highly assertive, has a strong desire to

be in a leadership role; passionate and

goal driven (may not necessarily equal

to ability and competence for the job),

strong infl uencer and enforcer. Lacks

internal refl ection and is not open to

others’ ideas.

Negative side: Rubs and brushes off

people the wrong way causing friction

unknowingly; a selective listener;

stubborn and dogmatic. Impatient, with

low EQ. Works well only with others

who are aligned thinkers.

How to manage: To create self-awareness

in the person and allow others to tell him

as it is. Using 360° feedback assessment

is one option to give an objective reality

check. 360° is an assessment that is

administered by trained facilitators,

which requires the individual to rate

himself, then is rated by a group of peers,

direct reports and his direct supervisor.

Such assessments are mostly used for

development purposes to identify gaps

and can be quite revealing.

5) Walkway Strollers (or Web Browsers)Characteristics: Highly mobile around

the offi ce complex and loves peeping into

others’ cubicle (workstation) fi nding out

how others are managing their work and

life. Thinks he is practising management

by walkabout (or thinks he is an aborigine

born in a previous life like in the movie

Outback) except that he forgets to

manage his own work, deliverables and

KPIs fi rst.

Traits to look out for: People-oriented,

low tolerance for structure, routine and

rules, short attention span, gets bored

with own work quickly, will need to talk

to others to regain the “feel good factor”

when work hits an obstacle or met with

roadblock. Possess tranquil inertia as

demonstrated by the lack of urgency in

their work approach.

Negative side: Low perseverance and lacks

initiative or interest to try new ways to

overcome obstacles while staying focused

at task at hand. Takes longer than others

to complete tasks. A procrastinator and

has habitual tendency to miss deadlines.

How to manage: Let them own up their

accountabilities and publicly announce

their key deliverables. Tie the team’s

performance and delivery to how each

member’s ability or failure to deliver on

time will affect the assessment of the

team’s performance and incentives.

6) Incessant ComplainersCharacteristics: Non-stop complaining

about the company, the working

environment, colleagues and customers;

does not see problems as opportunities

to improve a situation. Complains about

things but walks away when called to

take up the challenge to change things

for better.

Traits to look out for: Low willingness

to take up challenges. Has a very

strong mindset of what things “ought

to be”. Low or moderate technical

competencies to perform the job and

has a weak desire to improve oneself

by taking the necessary actions to learn

new skills and adopt a mindset shift to

address issues constructively.

Negative side: Does not act on

constructive feedback; may tire out

managers through the recurring need

to reinforce the same messages time and

again. Extreme cases – Does not hold

personal accountability and fails to deliver

results within own area of responsibility.

How to manage: If the situation is beyond

redemption and management is prepared

for possible casualties (i.e. the employee

leaves), conduct a one-on-one session

and tell the problem employee as it is.

The approach must be professional,

fact-based and objective, but most

importantly explain how his behaviour

affects productivity, team performance

and the company’s overall performance.

In addition, conducting a team dynamics

session where others are allowed to give

on-the-spot feedback to this problem

employee will also be a last resort to create

a strong wake-up call. If nothing works,

in extreme cases, it’s time to manage out

the problem.


Human Capital

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39- SEP 2009 MANAGEMENT


Human Capital

9) Priest Terrorist Characteristics: Strong personal

values and life principles; completely

passionate and committed to his own

belief system. Can be overzealous in

preaching or infl uencing others towards

one’s belief system.

Traits to look out for: High infl uencing

power, highly cause-motivated. Strong

interpersonal skills and enjoys teaching

and/or making presentations.

Negative side: Can either work with the

organisation or against the organisation,

depending on whether their values are

aligned or different.

How to manage: If the interviewer fi nds

such tendencies through profi ling, then

it is critical that the interviewer asks

the candidate what their values are and

check for alignment for or against the

organisation’s value and direction.

7) Ego AlmightyCharacteristics: Tends to focus on self-

justifi cation and excuses for certain

actions or inactions. Does not embrace

change in routine and styles willingly.

Works well and clicks with those who

are like-minded. They are also prone to

making decisions or choices according

to those who fan their ego and dance

to their tune.

Traits to look out for: Egoistical, overly

self-confi dent, has a very high opinion

of their own views and decisions.

Low intent and lacks need for self-

improvement. Lacks progressiveness

and is inward looking.

Negative side: Difficult to convince

and can be rebellious towards change

and new initiatives. Incurs a lot of

energy from direct supervisors in

their constant efforts of trying to get

alignment and engagement for these

Ego Almighty individuals.

How to manage: Needs to be given

specifi c performance criteria. There needs

to be coaching discussions to identify

personal values and direction to establish

gaps between company direction and the

employee’s own interest. If the behaviour

becomes too intense to handle, the fi nal

option is to manage the person out of

the organisation.

8) Emotional MoodyCharacteristics: Temperamental and

goes through mood swings; diffi cult to

predict the best time to communicate

with such employees. Appears distant

and can be rather cold towards others;

unable to control emotions and fi nds it

diffi cult to maintain self-composure.

Traits to look out for: Introverted, low

self-esteem, easily tensed and poor stress

management techniques, intolerant

to bluntness, pessimistic, weak in

interpersonal skills and display low

comfort with confl ict.

Negative side: Ultra-sensitive to

comments, inconsistent in responding to

different people within the organisation;

others will fi nd it very challenging to

relate and engage.

How to manage: If these traits become

too severe and to an extent damage

personal productivity and the ability to

control one’s emotions, then psychiatric

advice is needed where a combination of

psychological counselling and medical

prescription is needed to maintain a

healthy lifestyle.


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Human Capital

“By using appropriate

personality assessments,

the likelihood of a successful

job hire rises to 75%.”

About the Author

Kevin Tan is the Managing Director

of Omni View Consultancy (M) Sdn Bhd,

established since 1995. OVC is

currently the Master Distributor

and Country Manager for Harrison

Assessments Profi ling in Malaysia.

Harrison Assessments (HA) is able

to measure and predict job suitability

using performance-based criteria, and

can measure up to 156 work-related

traits. For a free and no-obligation

trial, email kevin@omn

www.omniview.net

How to improve your hiring oddsWhile some of these personalities

may already be walking around your

organisation – and causing stress on

the company’s time and resources –

it’s important for organisations to take

measures to avoid future costly mistakes.

And this is where a strategic HR manager

comes in; as opposed to an operational

HR manager who focuses on processes

and compliances, a strategic HR

manager looks at the bigger picture in

the organisation, and focuses on the best

strategies and tactics on how to curb toxic

behaviours within the organisation.

Having said that, it has to be pointed

out that traditional hiring techniques

may not offer the results you’re looking

for. What’s more, interviewing as well as

other traditional hiring techniques may

not be adequate to weed out toxic assets.

A study by the Michigan State University

found that traditional hiring techniques

– résumé reviews, interviews, and

reference checks – only provide a 14%

likelihood of a successful job hire.

The study also found that these odds

could be dramatically increased by the

effective use of powerful personality

assessments. By using appropriate

personality assessments, the likelihood

of a successful job hire rises to 75%.

Not only will you be hiring the best for

your company, you will have an easier

time retaining them because they fit

into the culture of your company and

the job. Bearing in mind that not all

assessment tools are the same, select

and use assessment tools that predict

the success and performance for a

specific given position – this is an

investment you certainly shouldn’t

skimp on.

Human Capital


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Human Capital

weeding out toxic assets - omni vie - weeding out toxic...through harrison assessments (www....

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