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The Science of Recruiting: Why Some Mortgage Employment Relationships Work and Others Fail

Steve Rennie
Dec 02, 2013

Why do some professionals just seem to “fit” better with their company? Why do some salespeople perform better at one company than another? These are questions that have driven those of us in the recruiting profession—more specific within mortgage sales recruiting—to try to identify the reasons for a successful fit and extraordinary performance so they can be replicated. When my company was founded in 2008, it was a challenging time for the mortgage industry, yet the constant through those challenges and through every cycle the industry has faced, has been the need to attract and retain highly productive mortgage sales professionals with books of business. Our experience in recruiting these specific professionals taught us that fit and production are by-products of what we call “Model-Match.” Where Model-Match exists, high production and long-term relationships are realized. Where Model-Match is absent, lack of production and failed long term relationships are more than likely. We have previously written about what the practice of Model-Matching looks like. Our definition: Model-matching is the process of improving the mutual results from relationships between lenders and originators. It is a comprehensive process of assessment of both parties across a wide range of factors, including leadership, culture, business, operations, technology and geography. This process involves due diligence and consideration of both objective and subjective factors of a relationship in order to produce a holistic picture of positive-matched and negative-matched areas within the relationship. What we have yet to describe are the psychological foundations for Model-Matching. This article will provide a condensed overview of research behind the concept of Model-Matching. With the respect for the principles of Dr. Robert Cialdini within the mortgage industry, relative to the topics of influence and persuasion, we believe such a grounding of our practices in widely accepted psychological research will be appreciated. Where does Model-Matching come from? Hierarchy of Needs—Abraham Maslow Dr. Abraham Maslow was an American psychologist who published Motivation and Personality, in 1954. Maslow’s theory, which is familiar to anyone who has every taken an introductory psychology class, describes human motivation as a result of pursuing more highly valued needs only after more basic needs have been met. According to Maslow, human needs proceed upward along this path: Physiological, Safety, Love/Belonging, Esteem and Self-Actualization. While Maslow’s work has largely been by-passed by other theories today, what his work established was the clear relationship between motivation and both internal and external factors that could be addressed by employers to improve job satisfaction and performance. Two-Factor Theory—Frederick Herzberg Dr. Frederick Herzberg was an American psychologist who published The Motivation to Work in 1959. In it, he described two competing sets of factors that determine how motivated a worker is to perform in his or her job. He described “motivator factors,” which include: Achievement, Recognition, Work Itself, Responsibility, Promotion and Growth. He also described “hygiene factors” or environmental factors which include: Company Policy and Administration, Supervision—Technical, Salary, Supervision—Personal and Working Conditions. Dr. Herzberg’s theory is still highly regarded within business today, as it has served as the foundation for a myriad of assessment tools (including our Model-Match Assessment) used to measure employee job satisfaction/dissatisfaction. His major contribution is the premise that an employee can be motivated, but still dissatisfied which can ultimately lead to a drop in productivity or the loss of the employee to another employer. Two-Factor Theory lies behind a key component of one of the biggest selling business books of the past 25 years, 1989’s First Break All the Rules: What the World’s Greatest Managers Do Differently, by Marcus Buckingham and Curt Coffman. In the book the authors provide the 12 fundamental questions that employees ask of themselves, and that great managers/leaders need to answer if they hope to keep their employees motivated and engaged. The 12 questions are: 1. Do I know what is expected of me at work? 2. Do I have the materials and equipment I need to do my work right? 3. Do I have the opportunity to do what I do best every day? 4. In the last seven days, have I received recognition or praise for doing good work? 5. Does my supervisor or someone at work seem to care about me as a person? 6. Is there someone at work who encourages my development? 7. At work, do my opinions seem to count? 8. Does the mission/purpose of my company make me feel my job is important? 9. Are my co-workers committed to doing quality work? 10. Do I have a best friend at work? 11. In the last six months, has someone talked to me about my progress? 12. This last year, have I had the opportunity at work to learn and grow? Expectancy Theory—Victor Vroom Dr. Victor Vroom is a Canadian-born, professor at Yale who published Work and Motivation in 1964. The crux of his theory is that individuals make choices based on estimates of how well the expected results of a given behavior are going to match up with, or eventually lead to, the desired results. Motivation is a product of the individual’s expectancy that a certain effort will lead to the intended performance. This is where we got our concept of “matching.” In mortgage sales, like other types of work, we are motivated by our belief that working hard (and smart) will result in the outcomes we desire. When producers’ expectations are aligned with the results they see, they remain motivated. When they lose that connection, perhaps due to leadership, communication, or managerial impediments, they lose their motivation and performance can suffer, or they will look for a better match elsewhere. Person-Organization Fit Theory—Amy Kristof-Brown Dr. Amy Kristof-Brown is a professor at the University of Iowa who edited Organizational Fit: Key Issues and New Directions just this year. However, she is credited with defining the theory of Person-Organization Fit (POF) back in 1996. The POF Theory states that employee attraction and performance is strongly impacted by the degree of compatibility between the person (employee) and the culture of the organization. Going beyond the Expectancy Theory of Vroom, POF theory adds the concept of “organizational brand identity” which simply says that membership in a group or organization that reflects an individual’s true or intended self-image allows them to feel as though they fit in a culture that reflects their true nature. Simply put, we all create a model of who we are, or want to be, and evaluate whether people, organizations or employers help or hinder us in being or becoming that person. The POF Theory informed the “model” component of our process of Model-Matching. Taken together Maslow’s Hierarchy or Needs, Herzberg’s Two Factor Theory, Vroom’s Expectancy Theory and Kristof-Brown’s conception of Person-Organization Fit provide the psychological underpinnings of Model-Matching. We wanted to understand how the interaction between employees and employers impacts both initial attraction to one another, as well as, performance and retention. What we learned from these scholars and have applied so successfully is that success in these relationships is tied to the degree of genuineness present. When both parties are open and honest about who they are, what they like and where they want to go, relationships flourish and endure while performance excels. Model-Matching is our way of determining compatibility, fostering success and preventing failure and disappointment. In the end … it’s just science. Steve Rennie is a managing partner at Hammerhouse LLC, an expanding national recruiting and strategic growth firm for the financial services industry with mortgage sales and leadership placement at its core. He may be reached by e-mail at [email protected] or call (949) 525-9407.
Dec 02, 2013