Wednesday, January 30, 2008

7 signs that employees hate the boss

There's a reason Dilbert, The Office, and their ilk are so popular. Satire gets old fast, but the appeal of realism endures. And the real world, sadly, is full of lousy bosses. Someone ought to do a study on where these louts come from.

Were they abused by their own bosses? Did they toss overboard the ballast of human kindness to hasten the ascent of their career balloons? Or is this an example of absolute power corrupting absolutely? Such research might also demonstrate how ubiquitous miserable managers are.

The proliferation of boss-bashing screeds with titles like When You Work for a Bully, Nasty Bosses, and How To Work for an Idiot suggests a plague.

A few months ago I enumerated five ways in which bosses could be great. A bookend column about bad bosses would never fit in this space, because while goodness tends to be monochromatic, badness comes in every color of the rainbow.

But bad bosses of all stripes evoke similar responses in employees; consequently, you can often tell that people hate you, even if you're not sure why.Inc. readers, of course, are all purebreds among top dogs. But on the off chance that a misfit manager stumbles across this page, here are seven signs that you are a bad boss:

The staff has developed guidelines for dealing with you and quietly passes them to new employees. "Never suggest that there might be another way of doing something," they might say. Or "Act self-deprecating so he doesn't feel threatened."

You have one or two fanatical acolytes. Yes, such devotion may be a testament to your fabulousness. But often when a boss is perceived as universally loathed, the staff opportunist offers herself up as sole confidante and friend, seeking power and favor at the expense of more honest, critical employees.

You never see people walk by. Employees would rather circumnavigate the entire office to get to the coffee machine or bathroom than take the shortcut past your door and risk being invited in.

Your 360-degree evaluations come back short and full of generically positive comments, with one very mild criticism ("Sometimes she works too damn hard for her own good") thrown in for credibility's sake.

People don't volunteer for your pet projects. The idea sucks, and they're afraid to tell you, or it's brilliant, but the consequences for letting you down are too terrible to imagine. And, of course, if it's your pet project, you'll probably work on it as well. Which means more time spent...gulp...with you.

You have legions of former employees, but they rarely give your name as a reference for new jobs. Either they don't trust you to give them their due, or they worry that because they were so miserable working for you, your recollections will also be dismal.

You have legions of former employees, period. If your staff falls away like linty Post-it notes, ask yourself: Is high turnover the problem? Or am I?

(http://www.rediff.com/money/2008/jan/29boss.htm)

Wednesday, January 23, 2008

Invest in a gold fund, not jewellery

As we head into 2008, it is with even greater worries about global instability - both political and financial. Iran's potential nuclear arsenal, a near certain US recession, continued fallout from the sub-prime crisis, all point to one direction as far as your investment portfolio is concerned - load up on gold.
 
Touching new highs. Other than a small blip in the first quarter of next year, gold prices are expected to continue on their bullish path. Currently, gold is trading in the range of $785-795 per ounce.
 
T Gnanasekar, director, Commtrendz says: "Typically, when the dollar weakens, gold prices go up, and vice-versa. At the moment, the dollar is strengthening and is expected to strengthen further in the first quarter. This will result in falling prices of gold. So, gold prices could come down to $745, even $700 per ounce, in the first quarter of the year. Subsequently, however, our target price for gold in 2008 is $900 per ounce."
 
Gold prices hit a 28-year high of $845 on November 7, 2007, when the dollar fell to record lows against major currencies and oil prices rose to all-time record levels. But the metal has lost nearly 6 per cent of its value since then as the dollar rebounds, oil prices trend off record highs and players square positions at beginning of 2008.
 
Invest in a gold fund, not jewellery. Week to week trends notwithstanding, gold continues to remain a solid bet for the future. In fact, with more and more asset management companies offering gold exchange traded funds, a good way to invest in the yellow metal is in the form of paper, that is, through gold funds.
 
These funds can easily be bought and sold and there would be no problems in liquidating your gold investments. Also, as the underlying gold of your fund is in the form of bullion, there are no losses in terms of design and making charges.
 
Traditionally, especially in India, investments in gold are in the form of jewellery and you face a significant loss of value when you sell your gold as a lot of your purchase price goes towards design and making charges.
 
"People are buying gold anyway in India, and buying this in the form of a fund is a far wiser investment than buying jewellery," says Sanjiv Shah, executive director, Benchmark Mutual Fund. Asset allocation is critical, and given the correlation of returns from other assets, it is appropriate that an investor hedges by investing in gold, feels Shah. "Returns on the metal have been fantastic in the last five years.
 
Ideally, 5-10 per cent of your portfolio must be diversified and gold is a good option," he says. If you are buying gold purely as an investment, then the storage argument is a strong one to prefer a gold ETF over buying the metal in its physical form.
 
Bars and coins are also good options. The other popular way of investing in gold is by buying gold bars. Earlier, gold bars were only available in jewellery shops, but now they are available at banks.
 
Though private players such as ICICI Bank and HDFC Bank were the first to begin retailing gold, now even public sector giants have got on the gold bandwagon. State Bank of India recently started selling gold, and currently offers this facility in 100 of its branches. It will see a significant expansion in the next two years.
 
However, do remember that if you buy gold bars from banks, they can only be sold at jewellery shops. The Reserve Bank of India does not allow banks to buy gold back from its customers.
 
A little gold in your portfolio can go a long way in keeping your investments buoyant. And now, with multiple ways of buying our favourite metal, there's no stopping the shimmer and the shine this New Year.
 
(http://us.rediff.com/money/2008/jan/09gold.htm)

Monday, January 21, 2008

10-point checklist for planning your taxes

Following is a ten-point checklist  for  planning your taxes
1. The most important thing to do is start compiling a list of the TDS you have paid. TDS operates like tax already paid i.e. from your final tax liability you have to pay only such amount that is over and above the tax already deducted. It is important for all taxpayers to collect the TDS certificates after the end of the fiscal year. Though these don� have to be attached with the tax return anymore, they have to be filed and kept on record and produced before the ITO if called for.

2. If you have availed of housing finance, be sure to collect the certificate of your EMIs and the total interest paid from the housing finance company.

3. If you haven't bought Mediclaim, do so now. There is a deduction of Rs. 15,000 (Rs. 20,000 if you are a senior citizen) available under Sec. 80D.

4. It is time to make your Sec. 80C  investments to claim tax rebate. PPF offers 8% tax-free. Equity linked savings schemes are the flavour of the season. Have you considered these?

5. Sec. 88 used to be unavailable to those earning above Rs. 5 lakh. However, its not so with Sec. 80C. Everyone, regardless of income level, can take advantage of the Rs. 1 lakh tax break offered by 80C.

Sec. 80C doesn� impose sub-limits like Sec. 88 used to. For example, under 88, you could invest only up to Rs. 10,000 in ELSS. Or only Rs. 20,000 was available for housing finance. Now, 80C is extremely flexible, as the erstwhile sub-limits have been dispensed with.

The EET tax regime has yet not been notified. Therefore, all your  tax savings investments for FY 07-08 will be under the old EEE system. For next year, defer your tax saving investments till such time there is clarity on the issue. The Government is expected to come out with the new tax laws anytime next year.

6. If you have made a donation, you need to submit the receipt issued by the institute (receiving the donation) to get the benefit of the deduction under Sec. 80G. If you have not collected such a receipt, do so soon.

7. If you are a female assessee under the age of 65, do not forget to take into account the special tax exemption slab of Rs 1,45,000 while arriving at your tax. And if you are above the age of 65, remember to claim the special slab exemption of Rs. 1,95,000.

8. If you are a trader, remember, Sec. 88E allows you a set-off of the Securities Transaction Tax against your trading profits. Arrive at your taxes only after claiming this set-off.

9. Last but not the least; get in order all your supporting documents of the tax planning/saving instruments that you have invested in. For employees, this directly affects the amount of TDS on your salary. If you are late, you would end up bearing a higher amount of TDS than what ought to have been deducted.

10. The last date for payment of advance tax is March 15th. However, if your advance tax payable is less than Rs. 5,000, then you can pay such tax while filing the return. Also, if you earn any income after 15th of March, pay tax on it on or before 31st and such tax would also be treated as advance tax.

Monday, January 07, 2008

Interview Tips: How Would You Move Mount Fuji?

(by William Poundstone, Book Excerpt)

The Impossible Question

In August 1957 William Shockley was recruiting staff for his Palo Alto, California, start-up, Shockley Semiconductor Laboratory. Shockley had been part of the Bell Labs team that invented the transistor. He had quit his job and come west to start his own company, telling people his goal was to make a million dollars. Everyone thought he was crazy. Shockley knew he wasn't. Unlike a lot of the people at Bell Labs, he knew the transistor was going to be big.

Shockley had an idea about how to make transistors cheaply. He was going to fabricate them out of silicon. He had come to this valley, south of San Francisco, to start production. He felt like he was on the cusp of history, in the right place at the right time. All that he needed was the right people. Shockley was leaving nothing to chance.

Today's interview was Jim Gibbons. He was a young guy, early twenties. He already had a Stanford Ph.D. He had studied at Cambridge too - on a Fulbright scholarship he'd won. Gibbons was sitting in front of him right now, in Shockley's Quonset hut office. Shockley picked up his stopwatch.

There's a tennis tournament with one hundred twenty-seven players, Shockley began, in measured tones. You've got one hundred twenty-six people paired off in sixty-three matches, plus one unpaired player as a bye. In the next round, there are sixty-four players and thirty-two matches. How many matches, total, does it take to determine a winner?

Shockley started the stopwatch. The hand had not gone far when Gibbons replied: One hundred twenty-six.

How did you do that? Shockley wanted to know. Have you heard this before?

Gibbons explained simply that it takes one match to eliminate one player. One hundred twenty-six players have to be eliminated to leave one winner. Therefore, there have to be 126 matches.

Shockley almost threw a tantrum. That was how he would have solved the problem, he told Gibbons. Gibbons had the distinct impression that Shockley did not care for other people using "his" method.

Shockley posed the next puzzle and clicked the stop-watch again. This one was harder for Gibbons. He thought a long time without answering. He noticed that, with each passing second, the room's atmosphere grew less tense. Shockley, seething at the previous answer, now relaxed like a man sinking into a hot bath. Finally, Shockley clicked off the stopwatch and said that Gibbons had already taken twice the lab average time to answer the question. He reported this with charitable satisfaction. Gibbons was hired.

Find the Heavy Billiard Ball...

Fast-forward forty years in time - only a few miles in space from long-since-defunct Shockley Semiconductor - to a much-changed Silicon Valley. Transistors etched onto silicon chips were as big as Shockley imagined. Software was even bigger. Stanford was having a career fair, and one of the most popular companies in attendance was the Microsoft Corporation. With the 1990s dot-com boom and bull market in full swing, Microsoft was famous as a place where employees of no particular distinction could make $1 million before their thirtieth birthday. Grad student Gene McKenna signed up for an interview with Microsoft's recruiter.

Suppose you had eight billiard balls, the recruiter began. One of them is slightly heavier, but the only way to tell is by putting it on a scale against the others. What's the fewest number of times you'd have to use the scale to find the heavier ball?

McKenna began reasoning aloud. Everything he said was sensible, but somehow nothing seemed to impress the recruiter. With hinting and prodding, McKenna came up with a billiard-ball-weighing scheme that was marginally acceptable to the Microsoft guy. The answer was two.

"Now, imagine Microsoft wanted to get into the appliance business," the recruiter then said. "Suppose we wanted to run a microwave oven from the computer. What software would you write to do this?"

"Why would you want to do that?" asked McKenna. "I don't want to go to my refrigerator, get out some food, put it in the microwave, and then run to my computer to start it!" "Well, the microwave could still have buttons on it too."

"So why do I want to run it from my computer?" "Well maybe you could make it programmable? For example, you could call your computer from work and have it start cooking your turkey." "But wouldn't my turkey," asked McKenna, "or any other food, go bad sitting in the microwave while I'm at work? I could put a frozen turkey in, but then it would drip water everywhere."

"What other options could the microwave have?" the recruiter asked. Pause. "For example, you could use the computer to download and exchange recipes." "You can do that now. Why does Microsoft want to bother with connecting the computer to the microwave?" "Well let's not worry about that. Just assume that Microsoft has decided this. It's your job to think up uses for it." McKenna thought in silence.

"Now maybe the recipes could be very complex," the recruiter said. "Like, 'Cook food at seven hundred watts for two minutes, then at three hundred watts for two more minutes, but don't let the temperature get above three hundred degrees.'"

"Well there is probably a small niche of people who would really love that, but most people can't program their VCR."

The Microsoft recruiter extended his hand. "Well, it was nice to meet you, Gene. Good luck with your job search." "Yeah," said McKenna. "Thanks."

The Impossible Question

Logic puzzles, riddles, hypothetical questions, and trick questions have a long tradition in computer-industry interviews. This is an expression of the start-up mentality in which every employee is expected to be a highly logical and motivated innovator, working seventy-hour weeks if need be to ship a product. It reflects the belief that the high-technology industries are different from the old economy: less stable, less certain, faster changing. The high-technology employee must be able to question assumptions and see things from novel perspectives. Puzzles and riddles (so the argument goes) test that ability.

In recent years, the chasm between high technology and old economy has narrowed. The uncertainties of a wired, ever-shifting global marketplace are imposing a start-up mentality throughout the corporate and professional world. That world is now adopting the peculiar style of interviewing that was formerly associated with lean, hungry technology companies. Puzzle-laden job interviews have infiltrated the Fortune 500 and the rust belt; law firms, banks, consulting firms, and the insurance industry; airlines, media, advertising, and even the armed forces. Brainteaser interview questions are reported from Italy, Russia, and India. Like it or not, puzzles and riddles are a hot new trend in hiring.

Fast-forward to the present - anywhere, almost any line of business. It's your next job interview. Be prepared to answer questions like these:

How many piano tuners are there in the world? If the Star Trek transporter was for real, how would that affect the transportation industry? Why does a mirror reverse right and left instead of up and down? If you could remove any of the fifty U.S. states, which would it be? Why are beer cans tapered on the ends? How long would it take to move Mount Fuji?

In the human resources trade, some of these riddles are privately known as impossible questions. Interviewers ask these questions in the earnest belief that they help gauge the intelligence, resourcefulness, or "outside-the-box thinking" needed to survive in today's hypercompetitive business world. Job applicants answer these questions in the also-earnest belief that this is what it takes to get hired at the top companies these days. A lot of earnest believing is going on.

To an anthropologist studying the hiring rituals of the early twenty-first century, the strangest thing about these impossible questions would probably be this: No one knows the answer. I have spoken with interviewers who use these questions, and they have enthusiastically assured me not only that they don't know the "correct answer" but that it makes no difference that they don't know the answer. I even spent an amusing couple of hours on the Internet trying to pull up "official" figures on the number of piano tuners in the world. Conclusion: There are no official figures. Piano-tuner organizations with impressive websites do not know how many piano tuners there are in the world.

Every business day, people are hired, or not hired, based on how well they answer these questions.

The impossible question is one phase of a broader phenomenon. Hiring interviews are becoming more invasive, more exhaustive, more deceptive, and meaner. The formerly straightforward courtship ritual between employer and employee has become more one-sided, a meat rack in which job candidates' mental processes are poked, prodded, and mercilessly evaluated. More and more, candidates are expected to "prove themselves" in job interviews. They must solve puzzles, avoid getting faked out by trick questions, and perform under manufactured stress.

"Let's play a game of Russian roulette," begins one interview stunt that is going the rounds at Wall Street investment banks. "You are tied to your chair and can't get up. Here's a gun. Here's the barrel of the gun, six chambers, all empty. Now watch me as I put two bullets in the gun. See how I put them in two adjacent chambers? I close the barrel and spin it. I put the gun to your head and pull the trigger. Click. You're still alive. Lucky you! Now, before we discuss your résumé, I'm going to pull the trigger one more time. Which would you prefer, that I spin the barrel first, or that I just pull the trigger?"

The good news is that the gun is imaginary. It's an "air gun," and the interviewer makes the appropriate gestures of spinning the barrel and pulling the trigger. The bad news is that your career future is being decided by someone who plays with imaginary guns.

This question is a logic puzzle. It has a correct answer and the interviewer knows what it is. You had better supply the right answer if you want the job. In the context of a job interview, solving a puzzle like this is probably as much about stress management as deductive logic. The Russian roulette question exemplifies the mind-set of these interviews - that people who can solve puzzles under stress make better employees than those who can't.

The popularity of today's stress - and puzzle-intensive interviews is generally attributed to one of America's most successful and ambivalently regarded corporations, Microsoft. The software giant receives about twelve thousand r?sum?s each month. That is amazing when you consider that the company has about fifty thousand employees, and Microsoft's turnover rate has been pegged at about a third of the industry average. Microsoft has more cause to be selective than most companies. This is reflected in its interview procedure.

Without need of human intervention, each résumé received at Microsoft is scanned for keywords and logged into a database. Promising résumés lead to a screening interview, usually by phone. Those who pass muster get a "fly back," a trip to Microsoft's Redmond, Washington, headquarters for a full-day marathon of famously difficult interviews. "We look for original, creative thinkers," says a section of the Microsoft website that is directed to college-age applicants, "and our interview process is designed to find those people." Six recent hires are pictured (three are women, three are black). "Your interview could include a technical discussion of the projects you've worked on, an abstract design question, or general problem-solving puzzles or brainteasers. The types of questions you'll be asked vary depending on the position you're looking for, but all are meant to investigate your capabilities and potential to grow. It's important for us to find out what you can do, not just what you've done." Another company publication advises bluntly: "Get over your fear of trick questions. You will probably be asked one or two. They are not exactly fair, but they are usually asked to see how you handle a difficult situation."

Riddles and Sphinxes

"Not exactly fair"? It's little wonder that some compare this style of interviewing to fraternity hazing, brainwashing, or the third degree. As one job applicant put it, "You never know when they are going to bring out the guy in the chicken suit."

Another apt analogy is that familiar type of video game where you confront a series of odd and hostile characters in a series of confined spaces, solving riddles to get from one space to the next. Not many make it to the highest levels; for most, after three or four encounters, the game is over. As classicists point out, those video games update the ancient Greek legend of Oedipus and the sphinx. The sphinx devoured anyone who couldn't answer her riddle: "What is it that walks on four legs in the morning, two legs at noon, and three legs in the evening?"

Oedipus solved the riddle by answering "Man." A baby crawls on all fours, an adult walks on two legs, and the elderly use a cane as a third leg. It was, in other words, a trick question.

The sphinx tale puzzles people even today. Why didn't they just shoot it? is the reaction of most college students. The principal source for the story, Sophocles's Oedipus Rex, is a realistic and psychologically nuanced tragedy. There the man-eating she-monster is as out of place, one scholar noted, as Godzilla would be if he were to lumber into the New York of Coppola's Godfather trilogy. Still, something about this crazy story strikes a chord. We all undergo tests in life. Maybe we succeed where all others have failed - or maybe not; at least, it's a common fantasy. There is something familiar in the banality of the riddle too, and in the weirdness of its poser. They remind us that the tests of life are not always reasonable and not always fair.

Tales of people proving their mettle by solving riddles exist in cultures around the globe. The "ordeal by trick question" was possibly raised to the highest art by the monks of Japanese Zen. Zen riddles are the antithesis of the Western logic puzzle, though one might describe them as demanding an extreme sort of outside-the-box thinking. A student of Zen demonstrates worthiness by giving a sublimely illogical answer to an impossible question. Zen master Shuzan once held out his short staff and announced to a follower: "If you call this a short staff, you oppose its reality. If you do not call it a short staff, you ignore the fact. Now what do you wish to call this?" In traditional Zen teaching, the penalty for a poor answer was a hard whack on the head with a short staff.

So Microsoft's "not exactly fair" questions are not exactly new. The company has repackaged the old "ordeal by riddle" for our own time. With its use of puzzles in its hiring decisions, Microsoft plays to the more appealing side of the digital generation mythos - of maverick independence and suspicion of established hierarchies. Puzzles are egalitarian, Microsoft's people contend, in that it doesn't matter what school you attended, where you worked before, or how you dress. All that matters is your logic, imagination, and problem-solving ability.

For of course Microsoft is an egalitarian meritocracy. It is ruthless about hiring what it calls the "top ten percent of the top ten percent." Microsoft's interviews are carefully engineered to weed out the "merely" competent who don't have the Microsoft level of competitive drive and creative problem-solving ability. It is estimated that less than one in four of those flown up to Redmond for a day of interviews receive a job offer. Like most riddle-bearing sphinxes, Microsoft's human resources department leaves a high body count.

Blank Slate

Microsoft is a fraught place. It represents the best and worst of how corporate America lives today. The software company that Bill Gates and Paul Allen founded was one of the great success stories of the last quarter of the twentieth century. The Justice Department's 1998 antitrust suit against Microsoft has not entirely dimmed that reputation. Maybe the opposite: Microsoft is now bad, and as we all know, bad is sometimes good. People have misgivings about Microsoft, just like they do about pit bulls and the Israeli Army. People also figure that if Microsoft hires this way, well, it may push the ethical envelope, but it must work.

Microsoft's role in changing interview practice is that of a catalyst. This influence owes to a shift in hiring priorities across industries. With bad hires more costly than ever, employers have given the job interview an importance it was never meant to have.

There was a time when a corporate job interview was a conversation. The applicant discussed past achievements and future goals. The interviewer discussed how those goals might or might not fit in with the company's. If the applicant was "put on the spot," it was with one of the old reliable human resources chestnuts such as "describe your worst fault." At many companies, that type of low-pressure interview is on its way out. The reasons are many. References, once the bedrock of sound hiring practice, are nearing extinction in our litigious society.The prospect of a million-dollar lawsuit filed by an employee given a "bad reference" weighs heavily on employers. This is often dated to 1984, when a Texas court ruled that an insurance salesman had been defamed when his employer, insurance firm Frank B. Hall and Company, was asked for a reference and candidly rated the salesman "a zero." The court added a few zeros of its own to the damage award ($1.9 million).

Employment attorneys observe that awards of that size are rarer than the near hysteria prevailing in human resources departments might suggest. They also allow that - theoretically - the law protects truthful references. It is tough to argue against caution, though. "We tell our clients not to get involved in references of any kind," said Vincent J. Appraises, former chair of the American Bar Association's Labor and Employment Law Section. "Just confirm or deny whether the person has been employed for a particular period of time and that's it. End of discussion."

Equally problematic for today's hirers is the generically positive reference letter. Some companies are so terrified of lawsuits that they hand them out indiscriminately to any employee who asks. It's no skin off their nose if someone else hires away an inept employee.

With references less common and less useful, hirers must seek information elsewhere. The job interview is the most direct means of assessing a candidate. But the ground rules for interviews have changed in the past decades. It is illegal in the United States for an interviewer to ask an applicant's age, weight, religion, political view, ethnicity, marital status, sexual preference, or financial status. Nor can an interviewer legally inquire whether a job seeker has children, drinks, votes, does charity work, or (save in bona fide security-sensitive jobs) has committed a major crime. This rules out many of the questions that used to be asked routinely ("How would your family feel about moving up here to Seattle?") and also a good deal of break-the-ice small talk. Hiring has always been about establishing a comfort level. The employer wants to feel reasonably certain that the applicant will succeed as an employee. That usually means sizing up a person from a variety of perspectives. In many ways, today's job candidate is a blank slate. He or she is a new person, stripped of the past, free of social context, existing only in the present moment. That leaves many employers scared.

One popular website for M.B.A. recruiting offers a "Social Security Number Decoder for Recruiters." Based on the first three digits, it tells where a job candidate was living when the social security number was issued. "The point being..." you ask? Well, it's one way of telling whether someone is lying about his past - a way of spotting contradictions when employers can't pose direct questions.

The Two-Second Interview

There are other, more serious reasons to worry about the American way of hiring. In the past decade, the traditional job interview has taken hits from putatively scientific studies. An increasing literature asserts the fallibility of interviewers.

Two Harvard psychologists, Nalini Ambady and Robert Rosenthal, did a particularly devastating experiment. Ambady had originally wanted to study what makes teachers effective. She suspected that nonverbal cues - body language and such - were important. To test this, she used some videotapes that had been made of a group of Harvard teaching fellows. She planned to show silent video clips to a group of people and have them rate the teachers for effectiveness.

Ambady wanted to use one-minute clips of each teacher. Unfortunately, the tapes hadn't been shot with this end in mind. They showed the teachers interacting with students. That was a problem, because having students visible in the clips might unconsciously affect the raters' opinions of the teachers. Ambady went to her adviser and said it wasn't going to work.

Then Ambady looked at the tapes again and decided she could get ten-second clips of teachers in which no students were visible. She did the study with those ten-second clips. Based on just ten seconds, the raters judged the teachers on a fifteen-item list of qualities.

Okay, if you have to judge someone from a ten-second video clip, you can. You probably wouldn't expect such a judgment to be worth anything.

Ambady repeated the experiment with five-second clips of the same teachers. Another group of raters judged them. Their assessments were, allowing for statistical error, identical to the ratings of the people who saw the ten-second clips.

Ambady then had another group view two-second clips of the same teachers. Again, the ratings were essentially the same.

The shocker was this: Ambady compared the video- clip ratings to ratings made by the students of the same teachers after a semester of classes. The students knew the professors much better than anyone possibly could from a silent video clip. No matter - the students' ratings were in close agreement with those of the people who saw only the videos. Complete strangers' opinions of a teacher, based on a silent two-second video, were nearly the same as those of students who had sat through a semester of classes.

It looks like people make a snap judgment of a person within two seconds of meeting him or her - a judgment not based on anything the person says. Only rarely does anything that happens after the first two seconds cause the judger to revise that first impression significantly.

All right, but the raters in this study were volunteer college students. Who knows what criteria they used to rate the teachers? Who knows whether they took the exercise seriously?

A more recent experiment attempts to treat the hiring situation more directly. Another of Rosenthal's students, Frank Bernieri (now at the University of Toledo), collabrated with graduate-student Neha Gada-Jain on a study in which they trained two interviewers for six weeks in accepted employment interviewing techniques. Then the two people interviewed ninety-eight volunteers of various backgrounds. Each interview was fifteen to twenty minutes, and all the interviews were captured on tape. After the interview, the trained interviewers rated the subjects.

Another student, Tricia Prickett, then edited the interview tapes down to fifteen seconds. Each fifteen-second clip showed the applicant entering the room, shaking hands with the interviewer, and sitting down. There was nothing more substantial than that. You guessed it - when another group rated the applicants just on the handshake clip, their opinions correlated strongly with those of the two trained interviewers who had the full interview to work from.

This would be funny if it weren't tragic. These studies suggest that the standard job interview is a pretense in which both interviewer and interviewee are equally and mutually duped. The interviewer has made up her mind by the time the interviewee has settled into a chair. Maybe the decision is based on looks, body language, or the "cut of your jib." What's certain is that it's not based on anything happening inside the job candidate's head. The questions and answers that follow are a sham, a way of convincing both that some rational basis exists for a hiring decision. In reality, the decision has already been made, on grounds that could not possibly be more superficial.

Human resources experts categorize interview questions with terms such as "traditional" and "behavioral." Traditional questions include the old standards that almost any American job seeker knows by heart. Where do you see yourself in five years? What do you do on your day off? What's the last book you've read? What are you most proud of?

Traditional-question interviews walk a tightrope between concealment and disclosure. They often invite the candidate to say something "bad" about himself, just to see how far he'll go. These questions seem to be about honesty. Really, they're about diplomacy. What you're most proud of might be your comic-book collection. That's not necessarily what the interviewer wants to hear, and you probably know that. There are safer answers, such as "the feeling of accomplishment I get from doing something - it could be anything - really well." The trouble with the traditional interview is that both sides are wise to the game. Practically everyone gives the safe answers. The interviewers nod, not believing a word of it.

This has led to the rise of behavioral questions. These ask the candidate to describe a past experience bearing on character and job skills. An example (used at Microsoft) is "Describe an instance in your life when you were faced with a problem and tackled it successfully." Another is "Describe a time when you had to work under deadline and there wasn't enough time to complete the job." The rationale for asking behavioral questions is that it's harder to fabricate a story than a one-liner.

Unfortunately, traditional and behavioral interview questions do almost nothing to counter the two-second snap judgment. These are soft, fuzzy, and ambivalent questions. Rarely addressed is what you're supposed to make of the answers. It's mostly gut instincts.

Ask yourself this: "Is there any conceivable answer to a traditional interview question that would cause me to want to hire someone on that answer alone? Is there any possible answer that would cause me to not want to hire someone?" I guess you can imagine alarming answers that might betray the candid psychopath. But most of the time, job candidates give the cautious and second-guessed answers everyone expects. With half-empty or half-full logic, an interviewer can use any answer retroactively to justify the first impression. Rarely does an answer challenge that first impression. This probably makes some interviewers comfortable. It may not be the best way to hire. It is far from clear that traditional and behavioral questions are a good way of spending the always-too-limited time in a job interview.

Future Tense

Microsoft's interviewing practices are a product of the pressures of the high-technology marketplace. Software is about ideas, not assembly lines, and those ideas are always changing. A software company's greatest asset is a talented workforce. "The most important thing we do is hire great people," Microsoft CEO Steve Ballmer has stated more than once.

But how do you recognize great people? It is harder than ever to equate talent with a specific set of skills. Skills can become obsolete practically overnight. So can business plans. Microsoft is conscious that it has to be looking for people capable of inventing the Microsoft of five or ten years hence. Microsoft's hiring focuses on the future tense. More than most big companies, Microsoft accepts rather than resists the "job candidate as blank slate." Its stated goal is to hire for what people can do rather than what they've done.

Because programming remains a youthful profession, Microsoft hires many people out of college. There is no job experience to guide hiring decisions. Nor is Microsoft overly impressed by schools and degrees. "We fully know how bogus [graduate school] is," one senior manager is reported to have said. This attitude has changed somewhat - Harvard dropout Bill Gates now encourages potential employees to get their degrees -but Microsoft has never been a place to hire people because they went to the right schools.

Microsoft is also a chauvinistic place. The private suspicion in Redmond seems to be that Sun, Oracle, IBM, and all the other companies are full of big, lazy slobs who couldn't cut it at Microsoft. The only kind of "experience" that counts for much is experience at Microsoft. So even with job candidates who have experience, the emphasis is on the future tense. Microsoft does not have a time machine that lets its human resources people zip ten years into a subjunctive future to see how well a candidate will perform on the job. Predictions about future performance are perforce based largely on how well candidates answer interview questions.

"Microsoft really does believe that it can judge a person through four or five one-hour interviews," claims former Microsoft developer Adam David Barr. Barr likens the interview process to the National Football League's annual draft. Some teams base decisions on a college football record, and others go by individual workouts where the college players are tested more rigorously. At Microsoft, the "workout" - the interview - is the main factor in hiring all but the most senior people.

Why use logic puzzles, riddles, and impossible questions? The goal of Microsoft's interviews is to assess a general problem-solving ability rather than a specific competency. At Microsoft, and now at many other companies, it is believed that there are parallels between the reasoning used to solve puzzles and the thought processes involved in solving the real problems of innovation and a changing marketplace.

Both the solver of a puzzle and a technical innovator must be able to identify essential elements in a situation that is initially ill-defined. It is rarely clear what type of reasoning is required or what the precise limits of the problem are. The solver must nonetheless persist until it is possible to bring the analysis to a timely and successful conclusion.

What This Book Will Do

The book will do five things. It will first trace the long and surprising history of the puzzle interview. In so doing, it will touch on such topics as intelligence tests for employment, the origins of Silicon Valley, the personal obsessions of Bill Gates, and the culture of Wall Street.

The book will then pose the following question: Do puzzle interviews work as claimed? Hirers tout these interviews, and job candidates complain about them. I will try to supply a balanced discussion of pros and cons - something that is often missing from the office watercooler debates. The book will present a large sample of the actual questions being used at Microsoft and elsewhere. Provided your career is not on the line, you may find these puzzles and riddles to be a lot of fun. Many readers will enjoy matching their wits against those of the bright folks in Redmond. For readers who'd like to play along, there's a list of Microsoft puzzles, riddles, and trick questions in chapter four (most of which are in widespread use at other companies as well). A separate list of some of the hardest interview puzzles being asked at other companies is in chapter seven. I will elaborate in the main narrative on some of these questions and the techniques used to answer them but will refrain from giving answers until the very end of the book.

The final two chapters are addressed in turn to the job candidate and the hirer. There is a genre of logic puzzle in which logical and ruthless adversaries attempt to outsmart each other. This is a good model of the puzzle interview. Chapter eight is written from the perspective of a job candidate confronted with puzzles in an interview. It presents a short and easily remembered list of tips for improving performance. Chapter nine is written from the opposite perspective -that of an interviewer confronted with a candidate who may be wise to the "tricks." It presents a list of tips for getting a fair assessment nonetheless.

If this appears a paradox, it is only because these interviews have been touted as being difficult or impossible to "prepare" for. Most logic puzzles exploit a relatively small set of mental "tricks." Knowing these tricks, and knowing the unspoken expectations governing these interviews, can help a candidate do his or her best.

The hirer, in turn, needs to recognize the possibility of preparation and structure the interview accordingly. The merits of puzzle interviews are too often defeated by the hazing-stunt atmosphere in which they are conducted and by use of trick questions whose solutions are easily remembered.

HOW WOULD YOU MOVE MOUNT FUJI? gives a proposal for how innovative companies ought to interview and explains how this type of interview can be improved by refocusing on its original goal of providing information that the hirer can use.

Copyright © 2003 by William Poundstone

How to invest in a Mutual Fund

Sanjay Prakash, CEO, HSBC Asset Management (India) Pvt Ltd, has an interesting tale.

Six years ago, he began to invest diligently every month in a mutual fund for his daughters.

From an amount as low as Rs 500 a month, he increased it to Rs 1,000. He then set himself a target of increasing it by Rs 500 every six months.

Today, he invests Rs 7,500 in each of his daughters' names every month.

Though very young and still in school, each girl has Rs 700,000 to her name.

Where did he invest? In a diversified equity fund.

How? Through a Systematic Investment Plan.

What is that?

An SIP is a vehicle offered by mutual funds to help you save regularly.

It is just like a recurring deposit with the post office or bank where you put in a small amount every month. The difference here is that the amount is invested in a mutual fund.

The minimum amount to be invested can be as small as Rs 500 and the frequency of investment is usually monthly or quarterly.

My friend would do well to learn from this.

Recently, when the Sensex rose to dizzying heights, the Net Asset Value of her funds soared too. The NAV is determined by the market price of the stocks the fund has invested in. So when the markets rise, the NAVs follow. And vice versa.

Being smart enough to sense she would not get a return like this in a while, she sold her units and made a tidy sum. Now, she is waiting for the market to slump and the NAVs to fall so she can buy them back cheap.

The theory is good; but does it work?

Nobody can time the market. Nobody can predict when it is going to fall or rise and by how much.

While she is waiting for the market to drop, she is missing out by just sitting on her money.

And just because she got it right once does not mean she will win again.

How an SIP works

An SIP allows you to take part in the stock market without trying to second guess its movements.

AN SIP means you commit yourself to investing a fixed amount every month. Let's say it is Rs 1,000.

When the NAV is high, you will get fewer units. When it drops, you will get more units.

Date

NAV

Approx number of units you will get at Rs 1,000

Jan 1

10

100

Feb 1

10.5

95.23

Mar 1

11

90.90

Apr 1

9.5

105.26

May 1

9

111.11

Jun 1

11.5

86.95

Within six months, you would have 5,894 units by investing just Rs 1,000 every month.

Over the long run, you make money

Let's say you invested in Prudential ICICI Technology Fund during the dotcom and tech boom.

Say you began with Rs 1,000 and kept investing Rs 1,000 every month. This would be the result:

Investment period

Mar 2000  -  Mar 2005

Monthly investment

Rs 1,000

Total amount invested

Rs 61,000

Value of investment of Mar 7, 2005

Rs 1,09,315

Return on investment

23.87%

Had you bought the units on March 13, 2000 at Rs 10.88 per unit (that was the NAV then), you would have lost because the NAV was just 7.04 on March 7, 2005. But because you spaced out your investment, you won.

How an SIP scores

It makes you disciplined in your savings. Every month you are forced to keep aside a fixed amount. This could either be debited directly from your account or you could give the mutual fund post-dated cheques.

As you see above, it helps you make money over the long term. Since you get more units when the NAV drops and fewer when it rises, the cost averages out over time. So you tide over all the ups and downs of the market without any drastic losses.

Also, a number of mutual funds do not charge an entry load if you opt for an SIP. This fee is a percentage of the amount you are investing. And if you do not exit (sell your units) within a year of buying the units, you do not have to pay an exit load (same as an entry load, except this is charged when you sell your units).

If, however, you do sell your units within a year, you would be charged an exit load. So it pays to stay invested for the long-run.

The best way to enter a mutual fund is via an SIP. But to get the benefit of an SIP, think of at least a three-year time frame when you won't touch your money.