Alan Pedersen was looking to improve his interviewing and hiring techniques, not write a corporate philosophy. But that is exactly where he had to start.

Pedersen, the 27-year-old president of Healthcare Affiliates Inc., in eastern Pennsylvania, hadn't yet had major trouble with his hiring, but saw potential problems in his senior staff's interviewing style. "They weren't asking the right questions," he says."They used the 'halo effect.' If they saw themselves in the person, someone who dresses nicely and has a good personality, they'd hire. They weren't placing enough emphasis on the candidate's prior work history."

He searched for a way to train his employees, wanting to avoid the high turnover and union problems that infest the health care industry. Since 1982, Pedersen has bought three "long-term healthcare facilities" (a term he prefers to "nursing home" because some of his patients are young convalescents), and he manages another. In all, he employs just over 200 people. A few months ago, he confided his concerns about his company's haphazard interviewing style to the awyer who negoiated the labor contract at his only unionized site.

It so happened that the lawyer's firm -- which specializes in labor management -- was selling a remedy. The firm, Pechner, Dorfman, Wolffe, Rounick & Cabot, markets a system aimed at taking the guesswork out of interviewing. In addressing the most critical hiring issues -- defining the job and assessing the candidate's ability to do it -- the method converts a subjective exercise into a reasonably objective tool.

"Most problems arise in companies because they hire the wrong type of person," says Stephen Cabot, the Philadelphia-based senior partner in charge of the program. "Corporate America's mentality is, 'I'll hire now and if it doesn't work out in 30 days, I'll fire.' The starting place has to be, What are you looking for?"

Cabot's three-step solution begins on that note. He first requires clients to define their corporate philosophy. "I invariably get cute phrases straight from their guts," he says."But it's important for them to make a formal commitment to what they stand for." He asks clients to articulate the keys to their company's success and how they would reward employees for helping meet corporate goals. The result is a formal statement, signed by members of the management team.

Alan Pedersen's philosophy springs from a fundamental goal of providing quality health care at a fair price. That can be achieved, his statement reads, only through the efforts of employees with "ability, patience, personality, and character" who are "meaningfully involved in their work." He promises that his company will treat each worker as an individual with unique feelings, concerns, and aspirations, and that "each individual here is free to express himself honestly and openly and communicate with all levels of management." The document goes on for several pages, spelling out the firm's commitment to long-term job security, competitive pay and benefits, and cooperative working relationships.

In step two of Cabot's employee profile system, management is asked to identify the qualities of its ideal employee. Responses can vary widely from business to business, says Cabot; aggression, for example, might be valuable in a reporter but a serious liability in a loan officer. When defining Healthcare Affiliates' ideal employee, Pedersen's staff came up with such words and phrases as "goal-oriented," "traditional values," "respectful," "flexible," and "trusting of authority" as desirable traits; they listed "confrontational," "inflexible," "restless," and anti-establishment" in the undesirable column. Both extremes reflect Pedersen's desire to build cooperative teams headed by administrative supervisors and nurses and supported by nursing, dietary, and housekeeping aides.

As the final step, Cabot's firm develops a series of interview questions keyed to the desirable-employee profile that has emerged from steps one and two. Some deliberately repetitive questions are included to double-check important attitudes.In addition to the questions, the client gets a list of anticipated responses and a guide to their interpretation."I've found that you can ask the best questions," says Pedersen, "but if you don't know how to judge the answers, it means diddly."

Seeking to gauge attitudes toward authority, for example, Healthcare Affiliates interviewers ask would-be aides, "What role should your supervisor play?" Some candidates tip their negative prejudice by responding, "Supervisors do nothing but sit behind a desk, while we do all the work." The preferred response is more along the lines of, "I like working with supervisors who will consider a subordinate's points of view even if they disagree."

To guard against interviewer biases, Cabot suggests that each candidate be interviewed at least twice. When Pedersen meets with people, they have already passed muster with the supervisor to whom they would report. Midway through the session, Pedersen hands them a copy of the company philosophy and asks them to read it."I tell them that this is how we treat our employees and how we expect to be treated in return. Their reaction is important," he says. Pedersen generally won't hire anyone who skims the material and hands it back without a word.

Designing and interpreting questions can be quite complex, Cabot says. Even within a single company, questions may differ significantly depending on the position to be filled. Geography can also be a factor. For example, one question on performance evaluation, developed for a national retailer, was, "Would you rather be judged individually or as part of a group?" New Yorkers stressed individually, while the company's Texas workers gave more conservative, team-centered responses. In interpreting these answers, the regional differences had to be taken into account.

In eight years of working with the employee profile system, Pechner Dorfman has amassed a computer file of more than 10,000 candidates' replies, which it uses to refine questions, check responses against job performance, and update the profile. The firm attempts to verify the expectations raised during interviews by comparing employees' responses with their work over a year-long period.

No single test, of course -- no matter how carefully refined -- should be viewed as an interviewing panacea. Behavioral scientists point out that even the best prediction systems can't measure motivation, and Stephen Cabot would certainly agree. The key lesson, however, is clear. "The more data you can get prior to making a gut hit, the less likely you'll be wrong," says Oren Harari, a management professor at the University of San Francisco (who is not familiar with Pechner Dorfman's procedures). Management can best prevent arbitrary hiring decisions, Harari says, by predetermining its needs and asking "situation-specific questions."

But what happens when -- after the most careful preparation -- you meet a smooth candidate who knows exactly what an interviewer wants to hear? Or what if your choice is between two people who seem equally qualified?

Alan Pedersen sees a lot of that, and he is ready with the answer. Once he is satisfied that someone meets his boilerplate criteria, he says, "You go with the person you like. The final decision is going to be personality." In the end, it still comes down to "gut reliance."

But at that point, at least, it is an educated gut.


Esquire magazine calls him the best mayor in America. He is a "genius mayor," according to Howard Cosell.

And an ingenious delegator to boot.

Baltimore's William Donald Schaefer has a not-so-subtle way of prodding his key staffers to clean up their acts. His Mayor's Action Memos call their attention to litter in the park, abandoned cars along the highway, stray dogs, unmowed grass, and broken curbs.

In his 13 years in office, the former lawyer has penned more than 3,000 action memos, the end products of his rounds of the 85-square-mile city and his stints on his own weekly call-in radio show. Mayor Schaefer has also overseen the rejuvenation of Baltimore's show-place Inner Harbor, the refurbishing of its city hall, and the construction of five interstate highways. His administration has created a number of economic incentives to restore low- and middle-income neighborhoods. He has -- here comes that phrase again -- the "bias for action" considered a primary trait of "excellent" companies.

"Years ago," says the mayor, "when I lived in a neighborhood, I noticed the city always took care of the big things. But it really bothered me when the light in front of my house burned out and wasn't replaced immediately. It's the little things that directly affect people in the community that I care about.When I became mayor, I had to find a way to call my people's attention to the things that weren't right."

What evolved is a quintuplicate form -- legal size -- containing a lost of department heads, a space to describe the action required, and room for both the mayor's and the recipient's comments. A sample to the department of public works: "I just found of invisible car. It's invisible, that is, to everyone but me. We'll show you where it is so you can remove it."

Another, scrawled in No. 2 pencil, stamped "rush," and dated March 26, 1984: "Washington Bld. and M.L. King Bld. NW corner. Bricks are displaced. In other words, the bricks are out."

The reply, typed: "Please be advised that the Bureau of Highways Maintenance Division . . . has scheduled the brick repair work at the northwest corner of Washington Boulevard & Martin Luther King Boulevard. It is anticipated that this project will be completed by Wednesday, April 11, 1984." Signed, Francis W. Kuchta.

Kuchta has been public works director for 10 years. "After the mayor's been out driving around or talking to people over a weekend," he says, "I usually get three or four action memos on Monday morning. The mayor, and rightly so, figures if he sees these things, why can't his staff? I don't take offense, but it might take new people a day or so to get used to them."

"It works," brags Schaefer. "I've got the best people working for me, and they take these things seriously. I don't have to check them so much now. But led me tell you what I just thought of today."

Annoyed to find trash accumulations in Harbor Place, he fired off a memo -- then describbled the date on a piece of garbage that he placed under a bush. Later, he would send someone to check for the dated garbage. "Maybe they can't see it," he says. "This way they'll remember."

CORRECTION-DATE: February 1985


The photograph on page 93 of the January issue is of Stephen Cabot, senior partner with Dorfman, Wolffe, Rounick & Cabot.