Correctly understanding situational demands is necessary to handle social situations appropriately. Past selection research has shown that candidates who are better at identifying the targeted dimensions in an interview or an assessment center, in fact, perform better in these procedures. However, at least two different processes might be responsible for the obtained findings. First, candidates might differ in their ability to correctly interpret given cues, meaning that some candidates generate better (i.e., more accurate) ideas than others. Second, some candidates might generally reflect more upon potential demands and therefore generate more ideas concerning potentially targeted dimensions. The present study used signal detection theory to investigate to what degree these two processes are related to interview performance. The interview was administered during a selection simulation for university graduates (N = 147). Interviewees' assumptions concerning the targeted dimensions were assessed in a postinterview questionnaire in which they had to write down any hypotheses as to what a certain question was trying to assess. We found that generating better ideas was essential for candidates' interview performance and not the degree to which they generally generated ideas about targeted interview dimension.