Gnip is growing, so I'm face-to-face with the beast that is hiring. Finding smart, compelling, passionate, committed, persistent people is hard. Assuming you find one (big assumption), testing your thesis is the big gamble. Even if you do a half-dozen face to face interviews, some "try before you buy" contracting projects, and spend some time with the person socially, you won't know what you've got until a couple of months into the arrangement. It all boils down to, yup, you guessed it, gut.
Some folks recommend contracting for awhile before committing to a full-time job offer. While contracting provides some flexibility, for both parties, it's pros are precisely its cons. There's generally little skin in the game, and its that skin that can make or break a company. A contractor will generally lose little, if any, sleep over your company, and there's little that's more motivating to solve a problem than the prospect of not being sound asleep tonight at 2am. I've had good luck with small, short, contained contracts. I've had not-so-good luck with long-term "pretend the contractor is a full-time employee" contracts.
I've seen some funny/odd scenarios wherein a hiring manager blames the hiree for not meeting expectations. While we all screw up here and there, and hire the wrong person for the job, this needs to be the exception when determining whether or not you're good at hiring. Sometimes you simply miss. However, you need to assume responsibility for the situation and work to rectify it. That may mean you find a new role (with more, or less, respsibility) for the individual. Spend more time with them to help get them on the right track. Or, let them go. I've seen situations however wherein the hiring manager makes bad call after bad call after bad call. Needless to say, it's the hiring manager's manager who needs to take responsibility for what's going on, and rectify it. Ultimately, building a team is a job responsibility (albeit probably the most difficult, and important one you'll ever have), and if you do it well, you'll be rewarded; vise versa of course.
Finally, hiring jerks can be fatal. Robert Sutton wrote "The No Asshole Rule", and I highly recommend it. If it looks like a duck, quacks like a duck.... it... is... a... duck.