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Société Générale is an international bank founded in 1864 in France. In 1918, SG acquired Cowen and Company in 1998 to gain a foothold in the investment banking industry in the United States. SG Cowen was considered a boutique size investment banking firm with around 1,500 employees with their main focus on two volatile, highly profitable areas, healthcare and technology. Kim Fennebresque, CEO of SG Cowen, believe that the firm should stay industry specific while expanding their operations.. To ensure SG Cowen had the best human capital and quality professionals to help grow their operation, they had several key decision making steps in their recruiting process.
The hiring process for new associates began in the fall. SG Cowen accepted applications from all any universities but focused their energy on “core business schools". The company partnered with core schools—ranking 15 to 25— for team captains to do company presentations and informational interviews. Next there were on campus interviews conducted by associates or senior associates known for their rigorous assessing skills to choose candidates. After 30 candidates were chosen, they move to the Super Saturday event for final interviews.
Investment banking is a brutal business where the stakes are high and the market is very volatile and competitive. Due to the complexity of government regulations, the risks involved, the long hours, and need to communicate to a variety of people, hiring talented individuals to do the work is a daunting task. In order to perform well in the global market, employers pay close attention when it comes to hiring Investment bankers. SG Cowen is no different. They prefer someone who has a lot of energy, extensive knowledge and experience in the financial industry, someone who is reliable and flexible and be able to thrive under the pressure. They should be able to display their propensity to love working at SG Cowen.
Evaluation of hiring process used by SG Cowen
SG Cowen judges candidates based on a myriad of skills/qualities (as mentioned in the Evaluation Form). Each year 30 associates are hired and out of whom about half are hired based on Super Saturday Performance. The timing of Saturday for the event is unique. It provides an opportunity to attract as many candidates as possible since most of the big financial firms are closed on Saturday. The hiring strategy shows their critical thinking skills, and it is also a win win situation for SG Cowen since markets are closed and nothing to lose at their end.
Super Saturday is a perfect example of SG Cowen’s having the right vision that led them to find and hire the most talented investment bankers in the country. The right vision can be a driving force in the organization and an important tool when used properly. “Without a sensible vision, a transformation effort can easily dissolve into a list of confusing and incompatible projects that can take the organization in the wrong direction or nowhere at all” (Potter, 1995).
Another important feature of the SG Cowen hiring procedure is how the current employees are involved at the ground-level and are responsible for the selection of their future colleagues. This connects with another concept addressed in Pfeffer’s paper regarding Participation and Empowerment, in which the following tactics are encouraged: “the decentralization of decision making and broader worker participation and empowerment in controlling their own work process.” The highest people in management could conceivably make all of the crucial recruiting and staffing decisions, but the people communicating with customers and working the daily tasks will most likely have a better judgment if the candidate would perform well in the defined role. In this sense, “lower-level employees, who may have more or better information, are permitted to do things to enhance performance.” *insert same footnote as above*.
The case states they have been not only successful in hiring talented employees, but the intensive process also ensures that the employees are a good fit and will remain happy in the organization, resulting in Employment Security. In Producing sustainable competitive advantage through the effective management of people, Jeffrey Pfeffer writes, “Security in employment and reliance on the workforce for competitive success mean that one must be careful to choose the right people, in the right way.” He highlights the importance of properly designing and executing a talent acquisition strategy, then argues that it directly relates to how the employee thinks and behaves going forward: “If someone goes through a rigorous selection process, the person feels that he or she is joining an elite organization. High expectations for performance are created, and the message is sent that people matter.”*insert footnote*
While the Super Saturday hiring model at SG Cowen proves to be an efficient and effective recruiting technique, and is extensive and designed to avoid bias, the rapid nature of the process breeds various perceptual errors that creates personnel biases and affects decision-making in the organization.
The targeting of only certain business schools does leave room for the Anchoring Trap and possibly leaves other qualified students from other business schools at a disadvantage. Furthermore, the bankers who interviewed a particular candidate may already have them in mind as proceeding to the final stages of the hiring process. They are relying on their subsequent judgements about the candidate rather being receptive to new information about candidates they didn’t personally interview.
Another concern in this process is Team Captains falling prey to Illusory Correlation when they have strong biases to how the ideal banker is supposed to act, look, and what background they should have. It was stated in the case that Andy Sanchez’s GPA was a concern because it was lower than the acceptable threshold for SG Cowen even though he clearly had a more than successful background in entrepreneurship and responsibility to help fund not only his education but also his brothers. Bankers do require unique personalities, however, that can be said about any career.
On the contrary, Super Saturday removes some of the biasness from the process because it allows 30 candidates to be interviewed by 5 separate bankers and assessed in total by 30 bankers, enabling an opportunity for independent reviews. For instance, there was Stereotyping and Anchoring Trap by some bankers in their opinion of Natalya as not culturally fit because her first language isn’t English and Ken as “too mature” for the job because he has a family, respectively, but there were other bankers who were in disagreement with that observation and expressed their opinion. Stereotyping and Anchoring Trap can be dangerous because they do not accurately describe the entire audience in that social category. Also there could be the Primacy effect, where first impressions cloud the overall judgment. The initial information received by the bankers on the candidates ended up being one of their most memorable characteristics and a major factor in the hiring decision.
Another example of the Anchoring trap is when Martin received good reviews not based on his business experience but because of the school he went to. The evidence in the case suggests Martin isn’t up to par with SG Cowen’s grading rubric because he isn’t “invested” in the company—he was difficult to schedule an interview with and was unable to show his commitment to SG Cowen. The scheduling issues overshadow his notable qualifications for the bankers. This would be an example of the Recency effect, in which the most recent information gets weighted more in an evaluation. Moreover, in the case of Martin we also see the bankers faced with the Prudence Trap. They wanted to consider making an offer to Martin but were hesitant because they were not sure if he would accept an alternate offer and were wary he would play firms against each other and thus risk of having a candidate reject their offer.
These scenarios are examples of various perceptual errors that are made in organizational settings when important decisions are tainted by extrapolated judgments. Although the established hiring process at SG Cowen is beneficial for the firm, they should be cautious of the pressure that gets put on recruiters to quickly choose candidates based on minimal data.
Selection of candidates for S G Cowen
Using the concepts from the book and the paper we as a team made an attempt to choose the two candidates. We choose Natalya Godlewska and Andy Sanchez.
Natalya because she exhibits exceptional scores, grasp of multiple languages, enthusiasm, and previous business experience. Even with concerns over her language skills and possibly being perceived as “stiff”, there were other bankers who were impressed with her positive attitude and majority were impressed with her.
Andy because of his demonstration of successful entrepreneurial business venture and by investing time and effort in showing his interest and commitment to the company. Even with scores that were poor in business school it can be explained due to his other commitments because he does have high SAT and GMAT scores.
Conclusion:
The investing banking company, SG Cowen believed in attracting talented, high quality professionals that believed in their organization's business model (Delong, 2016). Most managers in large firms such as SG Cowen, encounter many challenges when it comes to recruiting candidates into a strong rooted establishment. Each year, there is bound to be a vacancy for both internal and external recruiting opportunities Thus, processes and procedures should be in place for productive selection outcomes that ultimately contribute to a company’s competitive success.
