Thomas Melohn is one hokey fellow. Here's the president, co-owner, and "head sweeper" of North American Tool & Die Inc., who's blubbered on national TV talking about his "gang" of workers. And he regularly crowns a Superperson of the Month.

But Melohn contends that his employee-oriented management style -- which begins with an exhaustive hiring process in which Melohn selects 2 employees from 300 candidates -- makes money, and lots of it. Since he and a partner bought the San Leandro, Calif., maker of precision metal stampings and subassemblies in 1978, sales have risen from about $2 million to more than $20 million.

At the same time, Melohn has cut turnover from 27% to less than 4%, and virtually scotched absenteeism from its 10% high. The numbers, Melohn says, reflect the fact that "we truly care. I don't think most companies give a damn about employees."

After spending 24 years in corporate America, the 58-year-old Melohn says he felt "profound disillusionment" and sought a better way to manage people. His efforts all boil down to conferring upon the company a set of values, then "making sure you find people who have those values and can work together." It's not easy, but Melohn contends that hiring should be the chief executive's top priority. "Without good people, you're dead."

Melohn doesn't mind sharing some of his hiring tactics -- with one caveat. "My way isn't going to change your results next quarter," he warns. "You can't go in tomorrow and transform your company's values by saying, 'Let's all hold hands and love one another.' It's slower than that. But it works."

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Melohn knows that you value your employees above all else. But attracting people means showing them you are sincere. Here's where Melohn looks to see if a company is living up to its word:

* The bathroom. Broken lights, stray paper towels, and leaky ceilings show very little concern for employee well-being. And tear down separate executive and employee washrooms.

* The bulletin board. How do you feel when you read a note like this? "Chapter 7, Rule 3 of the employee handbook says that Thanksgiving turkeys will be distributed at 2:20 following the first shift. Please line up by department." Bulletin boards should include memos about improved quality and complimentary notes from customers -- not alienating and icy directives.

* Work in process. Are parts thrown into a bin, or are they stacked and layered? In their choice, employees are showing how much they care about their work.

* CEO lifestyle. If you use a special parking space, belong to three country clubs, and employ a private secretary, genuine communication with workers could be tough. "Those trappings of power say one thing," charges Melohn: " 'I am better than you.' "

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Apply Yourself and You'll Learn a Lot

Some 90% of candidates can be eliminated by examining job applications, Melohn contends. He calls the application "a little window to the soul," and he takes it seriously if that window looks streaked. North American Tool & Die produces parts with tolerances equal to roughly one-fourth the thickness of a human hair. So Melohn wants applications that look just so.

He also checks for previous job tenure. Even in Silicon Valley, with its periodic earthquakes -- economic and otherwise -- he resists candidates who have spent less than a year with any one employer. And if their previous salary amounts to 20% more than what Melohn can offer, he passes. Such people, he insists, will always be scavenging for a better-paying job.

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Questions to Ponder While Reading Applications

* Is it neat? Your first-grade teacher was right, after all. Neatness counts, especially if you are hiring someone for a highly technical job. "Neatness means there's a caring person," says Melohn.

* Is it complete? If not, observes Melohn, "it's an indication that the person doesn't follow instructions very well."

* What about outside interests? Coaching soccer or singing in a church choir are "activities that say, 'I give. I belong,' " says Melohn. A candidate who lists nothing -- or thinks it is nobody's business -- should give one pause. "I don't need someone like that," says Melohn. "It's not like I'm asking sexual preferences."

* Is there any relevant experience? Skills can be taught to the right person. But in Melohn's case, that person has probably worked in a factory before. He doesn't want people who are afraid of machines or driven mad by the monotonous thump of a punch press.

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Read All About It: Newspaper Ads

Nip turnover by composing a newspaper ad that weeds out bad fits. Here are Melohn's rules for using print:

* Run ads only in neighborhood newspapers. An unduly long commute -- any trip that takes more than 45 minutes -- will encourage people to continue to look for jobs closer to home.

* Design an ad that will be noticed. Two column inches will be missed by anyone who blinks. Melohn tries to get his ads at the top of a category listing, and runs them for 10 straight days.

* Choose words that communicate your company's values. Melohn uses such language as "caring about people," "fun, "super," and "neat." Says Melohn, "Johnny Macho is not going to answer an ad for a 'neat' place to work."

* Resist the standard appeal for résumés and references. Melohn's ads for salespeople implore candidates to "drop me a short note outlining why your background fits." That forces them to make more of an effort than running to the copy machine. Their notes give Melohn early insight into their values and communications skills. He asks production workers to come down and fill out an application. "It's an interesting way to see if they can find their way down here," he notes. "It shows how well they follow instructions."

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Looking for Help in All the Wrong Places

Looking for uncommonly good employees sometimes means searching in unconventional spots.

Every morning at 7:05, Melohn used to drive by a neighborhood grocery store. He could always count on seeing the same clean-cut young man sweeping the sidewalk outside.

One day Melohn pulled over and rolled down his window. "Every morning, I see you out here working before you go to school," he told the high-school-age boy. "I admire your discipline and dedication."

Then Melohn dug into his pocket and pulled out a business card. "If you are ever interested, I'd love to hire you," he said.

The boy glanced at the card, somewhat flustered. "Thank you, sir," he managed. "But I have my heart set on becoming a fireman."

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A Timetable

Melohn's job interviews last 30 minutes for a scientific reason: "I seem to screw up less at that length." Here's a breakdown of how he spends that time:

* Small talk (2 minutes): "Can I get you something to drink?" Melohn begins. He does it himself because he wants to show his employees aren't his slaves. If the candidate declines, Melohn still fetches himself a cup of tea, leaving time for the person to get comfortable. Then he'll serve up idle chatter along with the tea.

* Housekeeping details (2 minutes): Melohn almost never hires on the spot; he tells the prospectives that outright. "Knowing the schedule takes the pressure off them," he says. He repeats the same information at the end of the interview to cut down on phone calls and confusion later.

* Answering questions (7 to 15 minutes): "A job interview is a two-way street," Melohn tells applicants. "So tell me, what kinds of questions do you have?" He then shuts up. If they don't have any questions, Melohn prods, and they usually open up. What's the pay? Can you tell me the vacation policy? Such questions reveal someone who just wants a job. Melohn prefers to hear genuine curiosity. What do you manufacture here? Can I tour the plant?

* Start selling/cut it off (10 to 12 minutes): If Melohn likes what he hears, he starts selling candidates on coming to North American Tool & Die. He'll mention, for example, that medical benefits begin on day one of employment. Then he starts asking them about which shift they prefer or the machine that most interests them. If Melohn is getting bad vibes, he'll bring the interview to an "always dignified" close.

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The Warning Signs

An interviewee is probably stretching the truth when . . .

1. The interviewee leans forward and says, "Let me be honest with you."

2. Everything is "my" this or "my" that.

3. You find "one chink in the wall," as Melohn puts it. So, Melohn will ask, you're still working at XYZ Inc., right? Well, replies the candidate, I actually left a year ago. What have you been doing since then? Melohn asks. Some consulting, comes the reply. "It bothers me to find that gap," Melohn says. "There's probably more there."

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On the Line

Melohn trusts his line managers to tell him when it's time to add people, but he asks that they warn him at least two months ahead of time. He usually hires a month before the anticipated crunch. That way, he says, he can have people ready to go when production ramps up. "By the time things heat up, everyone knows where the john is, they have their tools, and they know their foreman," he says. "They are ready to get to work."

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Some Trying Situations

When he's hiring someone for a skilled job, Melohn's final test involves having them come in for a paid daylong or half-day trial.

Melohn's line managers -- "they have a loud voice in all of this," he stresses -- put the candidate through a few paces. Set up that machine, come up with a quote from this blueprint. "It's not only how they do, but it's the questions they ask along the way," he notes. "You can't fake it."

Sometimes the tryout can be quite definitive. One candidate left and called in his withdrawal from a nearby pay phone.

Once aboard, a new employee must still endure what Melohn calls "a 30-day honeymoon." During that period, says Melohn, "we see if we like him and he likes us." New hires get progress updates every Friday from department heads. Few fail.

"If you lower your standards, you deserve everything you get. You think there wasn't a labor shortage in Silicon Valley back when it was booming? You should hire temps to get through the shortage, if you have to. But don't lower your standards. You should know the price of one bad apple."

-- Joshua Hyatt

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WAGING BULL When it comes time to negotiate compensation, Melohn offers a radical proposal: be totally honest. With production workers, he simply pulls out a sheet listing the pay range for each job. Given your skills, he'll say, I think you fall about here.

"I make mistakes," he adds. "If I underpay you, I'll fix it. And if I overpay you, I hope you live up to it." Melohn tries to avoid paying less than what the candidate currently makes. On the other hand, he won't meet high demands. "It's not right to the people who are here," he says. "Plus, if you meet that demand, you have to wonder what the next demand will be: a corner office? Time off? A title?"

"One guy during an interview said, 'I love to dance.' I asked him why. He said, 'Because I enjoy the teamwork of it, the coordination with a partner.' I liked his honesty. For a man to admit that he loved to dance wasn't easy. And that he enjoyed teamwork would serve well here, I thought."

YOU'VE PROBABLY FOUND A GOOD EMPLOYEE WHEN . . . someone is candid enough to admit they were fired from their last job. Or to say, "I didn't like my last job." Of course, honesty is relative. "If someone says, 'I need the job to buy drugs,' that's the truth," notes Melohn. "But it's not the right motivation to work here."

"You should care enough to listen while interviewing. I feel a great obligation to the gang in the shop not to put a turkey in their midst. That's my motivation. You may not be born with interviewing skills, but they can be developed."

HELLO, I MUST BE GOING Once, during a promising interview, the prospect got up and announced that he had to depart. Had Melohn offended him in some way? "I've got season tickets to the Oakland A's," the man explained, "and this afternoon there's a playoff game." Right then and there, Melohn decided against him. But not because of his priorities. "He didn't plan ahead," says Melohn, "and that's not good."

Then there's the woman who brought her seven-year-old son and left him outside. Bring the lad in, Melohn suggested. "Watching them interact was a good way to pick up on her values," he says. He liked what he saw; he hired her.

SHRINK FOR YOURSELF You say you feel that prospective hires should undergo psychological testing? According to Melohn, you ought to have your head examined yourself. "I think testing is all horse hockey," he says. "It's more mumbo and jumbo and it's obtrusive at that. Anyway, people are just going to try to outguess it."

Melohn cannot tell a fib about lie detectors, either. "If I need to use a test to tell whether someone is not a liar, that's a sad commentary," he says. "I wouldn't want to be part of it."

HOW'S THE FAMILY? When interviewing someone who looks promising, Melohn makes it a point to ask about the person's spouse.

So, he'll say to a man, does your wife do any sewing? What kind? It's not that he's interested in starting a sewing circle; he's just always on the lookout for people who demonstrate manual dexterity.

"If he's got the right values for us, so does she, most likely," adds Melohn. If it turns out the spouse sews, say, belgian lace (as opposed to dish towels) he may come right out and pop the question: "Do you think your wife might be interested in working here, too?"