Improving Your Quality of Hire: A Primer to Effective Assessment Use

Conducted on 3/12/2009 by

Judy Chartrand, Ph.D.

Director, Talent Assessment

Pearson

Importance of Quality of Hire

• Global Survey of 4,741 executives – what is their most critical challenge in foreseeable future.

• Top US concerns:– Managing talent

– Improving leadership development

– Managing demographics

– Managing change

– Cultural transformation

Boston Consulting Group, World Federation of Personnel Management Association, Society of Human Resource Management, April 2008

Value of Assessments During Recession

• Find the best employees – less “room for error”

• Make hiring decisions more quickly

• Develop key talent and build bench strength

• Understand team effectiveness and morale

How Organization’s Benefit from Assessment Use: Pearson’s Client Success Survey

Find people and teams who:

• “Can hit the ground running”

• “Fit with the company’s emerging strategy”

• “Are capable of multi-tasking”

• “Make the best decisions and keep costs down”

• “Work together most productively”

The Stakes Are Higher Now

“If the economy was better, we would have more of a margin for error. We don’t have that margin of error now.”

—Pat Nangle,Actuarial Administration Manager

Farmers Insurance

“Before, there was a little more tolerance to bringing people up to speed. Now, it’s ‘Who’s really on the bus?’”

—Michael Scarpone,Scarpone & Associates

Today’s Agenda

• How to use assessments effectively in a selection program– ROI and Performance Gains

– Job Relevance

– Validity

– Implementation that is Consistent, Fair & Objective

• Leveraging Assessments in Talent Management

Poll Q1: How is your organization using assessments? (Select all that apply)

• For pre-employment selection

• For high potential identification

• In development programs

• For succession planning

• Not using assessments

Selection: Value of Science-Based Assessments

• Better precision when selecting employees

• Objective measure of capacity to learn quickly

• Deeper knowledge of your workforce’s capabilities

Define Business Outcomes

Define Key Worker CompetenciesDefine Job Requirements

Establish Assessment Validity

Implement Program

Evaluate Program and Refine

Pearson’s Selection Model: 5 Key Components

1: Define Business Outcomes

A. Define the business objectives that the organization is trying to achieve. Examples include:– Top-Line: increased revenue; increase customer satisfaction– Bottom Line: increased productivity and efficiency– HR Operational: increased legal defensibility

B. Identify the specific metrics that will define success:– Employee turnover, training costs, recruiting costs/hire, sales

revenue per agent, shrinkage and theft, average call handle time, etc.

Linking Strategic Business Objectives to Assessment

Performance on Team Engagement and Accountability

Conduct Job Analysis• Document primary work

activities and key competencies

• Use job experts to describe primary activities and key competencies

• Systematically organize documentation and data into a technical report

Conduct Competency Analysis• Prioritize the key competencies• Determine how to measure those

competencies• Differentiate between– Proficiency (competencies that

must be there day-one)– Capacity to Learn (potential to

quickly gain competencies)

2. Define work requirements and worker competencies for success

Work Requirements:Key Worker Competencies:

Workers Competencies

Best Measurement

Methods

Knowledge Experience

Skills

Cognitive Abilities

Critical Thinking, Verbal, Numerical,

Mechanical

Work Styles

Personality Traits,Attitudes, Motivation

Resumes, Structured Interviews, Credentials,

Skills Tests

Validated Assessments

Supported by Current Legal and Professional

Standards

Worker Competencies: A Holistic View

Poll Q2: What types of assessments does your organization use for selection (Select all that apply)

• Personality

• Cognitive Ability

• Simulations

• Skills Tests (e.g., proficiency in Microsoft)

Predicting Job Performance

Cognitive Ability

Personality

Simulations

Amount of Predictive Information Low High

Interviews

Sample: Competency Map for Clinical Directors

Competency Critical ThinkingAssessment

Personality Assessment

Decision Making Watson-Glaser: ability to evaluate arguments, draw accurate conclusions

Workplace Personality: •Adaptability/Flex.•Stress Tolerance•Leadership Orient

Sample Competencies for Executives

21st Century Competencies

Competency Critical ThinkingAssessment

Personality Assessment

Critical Thinking Watson-Glaser: ability to recognize assumptions, evaluate arguments, draw conclusions

Collaboration Workplace Personality

Inventory Concern for Others. Cooperation

Innovation Watson-Glaser: ability to recognize assumptions, evaluate arguments, draw conclusions

Workplace Personality

Inventory•Innovation•Adaptability

3. Establish Assessment Validity

• Content Validity:– Most basic level of evidence

– Clearly link job requirements with the assessment content

• Local Validation:– Strongest level of evidence

– Involves testing employees and relating assessment scores to job performance measures

– Should be used if there is concern about potential litigation related to hiring process

Example 1Example 1

Example 2Example 2

Examples from Bennett Mechanical Comprehension Test

Content Validity

Content Validity: Personality Items

• Preferred: behavioral, work-relevant– “I like dealing with unexpected changes in my daily work activities”

– “I enjoy work that requires being careful about details”

• Caution: not work-relevant– “As a child, I wanted to run away from home”

Local Validation Example

Purpose: Establish clear relationship between assessment and job performance

• Company: global paper manufacturer

• Position: machine operators

• Test: Bennett Mechanical Comprehension Test

• Performance Measures:

– Overall job performance

– Industrial/mechanical acumen

– Problem solving capability

Norms and Cut Scores

Why:

• Enhances company’s image and reputation

• Decreases the likelihood that candidates will file a legal complaint

• Proper use improves the effectiveness of selection tools. Scientifically-validated assessments work well only if people use them properly

How:

• Use validated assessments, which are more objective than resume reviews and interviews

• Company-wide training to insure proper implementation

• Follow best practice guidelines in assessment administration

• Establish selection decision rules

• Monitor for adverse impact(Adverse impact occurs when a selection tool screens out a disproportionate number of candidates from a protected group)

4. Implement a Selection Programthat is Consistent, Fair, and Objective

5. Evaluate and Refine

• Meet company’s business needs?

• Meeting selection objectives?– (e.g., increasing quality hires)

• Meeting legal guidelines?– (minimizing adverse impact)

Collect the Defined business Outcomes Analyze relationship between hires and business outcomes

Example: Double the Sales per Hour Between Lowest and Highest Scorers

Meeting Business Needs: ROI

0

1

2

3

4

5

6

Sales Per Hour

Assessment Fit Score

1 Lowest2345 Highest

Legal Issues

• Assessment relevant to the job

• Differential performance documented

• Norms relate to the specific job

• No discrimination against protected groups

Assessment Enables Strategic Talent Mgmt

Deep-Pro

Future Pro

Take Action

Utility Pro

Utility Player

Future Utility

ConsistentStar

Future Star

Rough Diamond

LOW

High Potentials: Performance/Potential Matrix

HIGH

Performance versus Potential

Performance: Behavior

• Performance Ratings

– Supervisor

– 360

• Industry/Technical Knowledge

• Company tenure and advancement

Potential: Aptitude

• Learning Capacity

– Ability Tests

• Leadership Aptitude

– Personality Assessment

• Personal Factors

– Ability to Relocate

– Career Goals

Assessment Informs Organizational Plan

Competency 1 2 4 4 5

Strategic Thinking 12 28 10 4 2

Innovation 14 26 9 5 2

Decision Making 7 12 23 9 5

Results Oriented 2 9 15 19 11

Customer Focus 2 8 14 20 12

Competency Rating (Low to High)

Group: 56 District Managers

SR VPSR VP

Region ARegion A Region BRegion B Region CRegion C Region DRegion D

Person 1Person 1

Person 2Person 2

Person 3Person 3

Person 4Person 4 Person 6Person 6 Person 10Person 10

Person 5Person 5 Person 7Person 7

Person 8Person 8

Person 11Person 11

Person 9Person 9

Person 12Person 12

Assessment Shows Bench Strength

Ready Now

Ready 1-3 yrs

Goal: For each senior position, have2-3 successors identified, includinga development plan for each

Questions or Comments

Contact Information

Judy Chartrand: Judy.Chartrand@Pearson.com

Chad Fife: Chad.Fife@Pearson.com

www.TalentLens.com