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It is about overall character and one's sense of responsibility. Of course, that doesn't matter in certain jobs but being dependable/reliable is required for quite a few of them.
I know someone who is accounting. She routinely uses her company credit card for personal purchases and then borrows money from others to pay it back before they do the monthly audits. She has filed backruptcy several times and generally pays ALL her bills late every month. In the meantime, she tries to "keep up with the Joneses" and has recently been talking about buying a boat. She has liquidated her retirement fund and her 401K accounts because of overspending. She has a credit score in the 400s now and would probably never be hired for her job if she were ever let go from her company. Yet, her playing around with company money is a way of life for her.
I was thinking about what to say about the question and I saw this post below and I could not say it better myself. I voted YES!
Quote:
Originally Posted by NJBest
Research has consistently shown that behavior extends across multiple contexts. For example, if you are friendly to your neighbor, you are more likely to be friendly to your coworkers or even a waitress. If you excessively clean your bathroom, you are more likely to also excessively clean your kitchen. If you worked hard in school, you are more likely to work hard at work. If you have good oral hygiene, you are likely to eat healthy foods as well.
The same applies to all sorts of other behavior. If one is careless with their liabilities, who knows what else they are careless with. It's risky to trust your business with a careless individual.
What doesn't make sense is hiring based on personal biases which only add to the perception, but are far removed from reality. I guess that explains why up to 95% of all managers deliver sub-par performance.
As far as the relationship between credit and job performance goes, science says it is non-existent:
Isn't hiring ultimately based on personal biases? In the end, its still a judgement call (be it good, or bad), no?
And speaking of 'perception' - where are you getting this 95% manager statistic? sub-par performance in terms of what? Or are you simply offering your opinion as a 'statistical fact'?
Also - your article doesn't say its "non-existent".
Quote:
High performance in both task and citizenship categories have a positive impact on businesses, the report says. And Bernerth’s team found that people with higher credit scores were better both at task performance as well as citizenship behavior. “It’s really about consistency,” he says. “We’re all driven towards consistency. If we’re being relaible and dependable in terms of our financial behavior, there’s a consistency in us that drives us towards those sorts of behaviors on the job.”
What it does say is that using it as a "de facto standard" is probably not a good idea:
Quote:
But credit data doesn’t tell the whole story — and Bernerth says too many employers today seem to treat job applicant credit scores as de facto personality assessments, which is a mistake.
Location: In a city within a state where politicians come to get their PHDs in Corruption
2,907 posts, read 2,069,650 times
Reputation: 4478
Quote:
Originally Posted by griffon652
Did you even read the article that YOU posted to support your argument?? It says that they DO think higher credit score is an indicator of better job performance. Your study just stated that lower scores doesn't have a direct correlation with ethics.
Notice I never made any mention of unethical behavior being correlated with credit scores in any of my posts. I was reffering to more obvious traits. People with higher credit scores are more likely to (in general) be responsible, think before acting, have more self-control etc. The study in your link won't dispute that fact. Here is a part from your link:
"Those who feel credit scores have no place in the hiring process will, however, be disheartened by some of the other findings. Bernerth says researchers found correlations between credit scores and what he terms task performance” and “citizenship behavior.” The first addresses how well people do in their day-to-day job functions, such as whether or not they complete assignments properly and on time. The second is characterized in the research report as discretionary actions that benefit either the company or the individual.
High performance in both task and citizenship categories have a positive impact on businesses, the report says. And Bernerth’s team found that people with higher credit scores were better both at task performance as well as citizenship behavior"
Hmmm so people who are more responsible at paying their debts on time are also more likely to finish office work on time? Who knew??
Touche. I was typing two responses at once, using job performance and fraud intermediately.
But credit data doesn’t tell the whole story — and Bernerth says too many employers today seem to treat job applicant credit scores as de facto personality assessments, which is a mistake. “If you look at what actually goes into a credit score, only 35 percent of it is your repayment history,” he says. Paying bills on time does demonstrate that a person is financially conscientious, but a long stretch of unemployment or other hardship like a medical crisis can skew that.
This basically says that there is a difference between habitual "bad payers" and those who have been hit by extenuating circumstances, and they should not all be treated equally. Can we both agree that someone who was hit by $200,000 medical bills after having meticulous payment history is not the same as someone who has a continuous history of poor credit?
Finally, there are hell of lot better ways to assess someone's "discretionary traits" than credit history.
This basically says that there is a difference between habitual "bad payers" and those who have been hit by extenuating circumstances, and they should not all be treated equally. Can we both agree that someone who was hit by $200,000 medical bills after having meticulous payment history is not the same as someone who has a continuous history of poor credit?
I absolutely agree with you on the above scenario. But companies can't make that distinction because it would mean taking a chance they don't have to. Most companies usually adopt the "better to be safe then sorry" strategy. Meaning in this economy of oversaturated qualified applicants; they have absolutely no reason to pick the guy with bad credit over the guy who's equally qualified with good credit.
State of New York has an estimated deficit of $1.7 billion. So by their logic and yours since you seem to subscribe to it, every employee that works for that state is a red flag for potential employee fraud, and is therefore deemed unhireable.
After all, if they can't handle their finances, they are irresponsible.
It's about bad debt - charge offs and collections. NY has not defaulted on any obligations to date. That probably doesn't change the fact that all of the politicians that created the mess should be fired, but it is not exactly like a person with 2 repos and a credit card they never paid on.
Personally, the only time I feel credit should be used is if the job has a true fiduciary capacity - meaning someone gives you money and trusts you to do the right thing with it. Retail? No way, customer still gets the item they "paid" for - it should be up to the employer to create a loss prevention policy. Then again, maybe that's just it, loss prevention. You get back to that "indicator of behavior" that has tons of data behind it.
What doesn't make sense is hiring based on personal biases which only add to the perception, but are far removed from reality. I guess that explains why up to 95% of all managers deliver sub-par performance.
As far as the relationship between credit and job performance goes, science says it is non-existent:
Most positions don't require that employees need to have their credit reports checked. The companies which do this are usually trying to find "perfect employees" and often use speculative means to do so. Since their turnover rates often equal or exceed those of companies which don't perform these checks, it doesn't appear to be an effective screening tool.
Also, job seekers who allow companies to check the credit ratings risk becoming the victims of ID fraud. After all, you have just told a potential con artist that you have a exceptional credit rating for them to damage. Think about that when you fill out paperwork allowing someone to run your credit.
You pretty much summed up what I was going to say.
Yippy the credit rating isn't about knowing EXACTLY what personality traits an individual has. But based on the credit score an employer can determine which personality traits the potential employee has the propensity to have.
Let me put it to you in a practical sense. If you were trying to hire a nanny for your 2 year old who would you hire?
A. Nice lady, with experience but is a convicted felon (for forgery)
B. Nice lady with experience with no criminal record
Everyone who is not insane will choose option B.
Hence a criminal background check, which is not a credit rating. This topic is about judging merit for a job based on credit history.
Hence a criminal background check, which is not a credit rating. This topic is about judging merit for a job based on credit history.
Rather then explain what I meant by that example again, please read my two posts following that post. I explained what I meant by my example in those posts. Me using the " criminal background check" had absolutely nothing to do with the check itself; and had everything to do with the concept behind why someone should be judged based on their credit.
What doesn't make sense is hiring based on personal biases which only add to the perception, but are far removed from reality. I guess that explains why up to 95% of all managers deliver sub-par performance.
As far as the relationship between credit and job performance goes, science says it is non-existent:
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It says that they DO think higher credit score is an indicator of better job performance. Your study just stated that lower scores doesn't have a direct correlation with ethics.
