Samuel A. Swift and Don A. Moore of the University of California at Berkeley, Zachariah S. Sharek of Carnegie Mellon University, and and Francesca Gino of the Harvard Business School have conducted some fascinating new research that might explain why we often make the mistake of hiring someone who isn't as qualified as we think he or she is. The scholars find that, "Across all our studies, the results suggest that experts take high performance as evidence of high ability and do not sufficiently discount it by the ease with which that performance was achieved." How does this problem manifest itself? Imagine that you are looking at a candidate for a sales position who worked in a high-flying business that was growing very rapidly. You might fail to account for the fact that it is much easier being a sales person in that type of company as opposed to working for a mature company with low organic growth.
The scholars conducted several experimental studies which showed that people often select candidates who have excelled at easier jobs/tasks over those individuals who may have performed slightly worse at a much more challenging task. The scholars also looked at actual admissions data for graduate schools of business. They found that students are at an advantage if they went to an undergraduate institution with a grade inflation problem! In other words, if you went to a school that gave out easy A's, you have a better shot at getting into a good MBA program; the admissions officers are not doing a good enough job evaluating the difficulty level of various undergraduate programs.
As a business school professor, I'm saddened that we appear to be rewarding grade inflation. The study shines a spotlight on an important problem. The research has much broader implications though; it shows us why many kinds of organizations may make poor hiring decisions.