Thursday, May 12, 2016

Putting Talent to the Test: Getting the Greatest Value from Assessments, Both Pre- and Post-Hire

As featured in April's TD Magazine:

Both Human Resources (HR) and Learning and Development (L&D) functions are tasked with the same goal: maximizing employee performance. Responsibility for the components of the typical employee lifecycle—hiring, onboarding, training, coaching, developing, evaluating performance, succession planning—are often divided down the middle between HR and L&D. It is intuitive to think that people strategies should be closely aligned and integrated between these two functions, each leveraging the intellectual capital acquired by the other. Unfortunately, all too often, organizations witness HR and L&D operating in relative isolation, focused on their individual departmental objectives rather than their shared mission.

The reality is that, for employees to thrive, a symbiotic relationship must exist between HR and L&D departments. HR can hire exceptional talent that withers on the vine if L&D is not nurturing and growing that talent. And, reciprocally, L&D can provide exquisitely designed development programs that fail to achieve results if the right people are not “on the bus.” So how can HR and L&D professionals leverage shared strategies for achieving their collective mission? As top leaders demand more evidence-based people decisions, leveraging the data gleaned from employee assessments is a powerful way to increase both the value and effectiveness of both functions.

 First: Hire the Right People
While this charge typically falls to those in the HR arena, L&D certainly has a vested interest. After all, how many times is the L&D team tasked with “fixing,” via coaching or training, an employee who frankly isn’t cut out for the position they’re in? Foundational to hiring success is a systematic and scientific process that maximizes the odds of hiring the best people as often as possible. This is the value proposition of pre-hire assessments.

There is ample research demonstrating that the use of well-developed assessment tools greatly increases the odds of hiring top performing employees over more subjective (yet heavily relied on) selection methods such as interviews and reference checks. However, there are several key factors to consider in order to create a selection assessment system that packs a predictive punch.

a.      Be clear about the goal

“We want to hire better people” is not a clear enough objective. Whether you are trying to impact turnover, employee engagement, sales volume, customer/patient satisfaction, productivity, theft, absenteeism, safety incidents, scrap rates, product quality, or some other outcome, there are different assessment instruments scientifically designed to impact these, and countless other, organizational goals.

Many traditional HR and L&D metrics—time to fill, time to productivity, retention, cost per hire, performance in a training class—can be positively impacted by integrating an appropriate type of assessment instrument. However, it’s essential to know which are the most important metrics to move the needle on. For example, if inbound call on-hold times or order pick rates have a greater financial impact on the organization than employee retention, make sure you’re focused on the metrics that matter most. Once your objective is clear, you can determine what constructs you can measure that will be most predictive of these mission critical outcomes.

      b.      Decide what to measure

Virtually any human characteristic can be measured with an assessment, including personality, skills, abilities, problem solving capabilities, knowledge, intelligence, interests, values, beliefs, and more. However, in most cases, companies don’t have the luxury, in terms of time or money, of assessing all these things (nor do they have candidates who would tolerate such a grueling endeavor). Therefore it’s important to identify which measurable characteristics will be most predictive of the outcomes you’re trying to achieve.

 Job analysis is one tool that enables you to think beyond roles, responsibilities, job descriptions, and job duties, and pinpoint what truly differentiates between someone who can merely do the job adequately and someone who blows expectations out of the water. L&D staff can play a valuable role in conducting job analyses, as they are often intimately familiar with critical roles as a result of designing custom training curriculum and/or being aware of where employees struggle to perform.

c.       Use the most predictive screening methods

Extensive research has been done on the predictive validity—the overall ability to predict job performance—of different hiring methods and measures. The table below reports the relative validity of some of the most commonly used selection methods based on a meta-analysis of a century’s worth of workplace productivity data1.

Graphology (Handwriting Analysis)
Personality Tests
Emotional Intelligence
Reference Checks
Integrity Tests
Cognitive Ability Tests
Multi-Measure Tests (i.e., Cognitive Ability + Personality + Interests)

This means that if your hiring process relies primarily on interviews, reference checks, and even personality tests, you are electing to use a process that is significantly less effective than it could be. The litmus test for any selection method should be “is the information gleaned from this step in the process clearly predictive of future job performance?” If the answer is no, there is probably no point in using it.

     d.      Select good instruments

Candidly, many people who choose a career in HR or L&D don’t do so because of their love of statistics. Therefore, it’s understandable that sifting through a highly technical validation document may be daunting; however, it’s also necessary. An assessment instrument must meet certain criteria related to reliability, validity, job relevance, adverse impact, and a number of other factors in order to be legally defensible. Test publishers should be able to provide ample data showing how rigorous they were in developing their instruments. If necessary, seek assistance in critically scrutinizing this information (consultants, academics, or Industrial/Organizational Psychologists are some potential resources).

If you suspect that your company’s selection system is not hitting on all of the above four cylinders, partner with your HR colleagues to determine if there are changes that can be made to increase the predictive power of the process.

Second: Leverage pre-hire assessment data post-hire
While substantial value is gained from using assessments for selection, it is unfortunate when the benefit ends there. By this point, the organization has made an investment, in both the tool and the candidate, and should maximize that investment. “The failure to value pre-hire data as part of post-hire talent management activities represents a wasted opportunity to realize a deeper level of predictive value from assessment tools,” according to Bersin & Associates’ Prehire Assessment Primer2. Furthermore, according to a 2015 Aberdeen study, companies that correlate pre-hire assessments with ongoing employee performance results are 24% more likely to have a greater number of employees who exceed expectations3.

Many pre-hire assessments lend themselves to a variety of post-hire applications, including:

·         Enabling managers to develop individually nuanced strategies for motivating, rewarding, and incentivizing each of their employees.

·         Facilitating a proactive dialog between new hires and their manager on potential challenge areas and possible solutions.

·         Creating highly targeted employee development plans based on identified deficits in knowledge, skills, or behavioral tendencies.

·         Tailoring the content and/or format of a training or orientation class based on the personalities, learning styles, or existing knowledge base of the participants.

·         Helping new employees assimilate with their team or department, and maximizing team effectiveness.

·         Developing succession plans or career paths that consider future job-fit and identify needed development to prepare employees for success in their next role.

Currently less than a quarter of line managers think their L&D department is critical to achieving business goals, according to 2015 research by Bersin by Deloitte4. Being able to use assessment data to tailor employee development initiatives that are aligned with business goals can go a long way in demonstrating L&D’s value.

Caution: One size does not fit all
The ultimate goal of a well-developed pre-hire assessment system is predicting future job performance. This may mean utilizing an assessment that measures more stable, “hard wired” characteristics that are not likely to change over time. It is important to understand the nature of what the tool is measuring to ensure appropriate use of this information post-hire. For example, imagine Alex is being groomed for a supervisory position. Her assessment results show that she scores very low on assertiveness and decisiveness. Can the L&D team train her to be an assertive and decisive person? Probably not. However, there are two things they can do to help Alex prepare for her new role:

1)      Increase self-awareness. Having a candid conversation with Alex about the aspects of the new role that may cause her to step out of her comfort zone will allow her to assume the role with eyes wide open.

2)      Develop adaptive strategies. While Alex still may shudder at the idea of confrontation or making a snap decision, there are certainly learnable skills, techniques, and strategies that will enable her to be more comfortable, confident, and functional in situations requiring these behaviors.

On the other hand, many of the assessments commonly used in L&D applications—four-quadrant personality assessments, or communication or leadership style assessments, for example—are not ideal for use pre-hire. While there are many tools available that lend themselves nicely to multiple applications, it’s critical to make sure all parties understand the exact nature of the tool, what it’s measuring, and appropriate and inappropriate ways to internalize and apply the information provided.

Third: Demonstrate Your Value
All too often, both HR and L&D functions are seen as cost centers, constantly asked to justify their existence and expenditures. With payroll and benefits representing one of the largest line items on virtually every company’s operating statement, incorporating assessments and tying results to key organizational metrics can be a highly compelling way to demonstrate the value that both departments add to the bottom line.

The need to demonstrate fiscal impact is heightened further due to an increased focus on incorporating metrics, analytics, and big data into decision making. “We see CEOs and others wanting better data and not just a headcount report, but how is talent driving business results?” says Scott Pollak, a principal at PwC Saratoga in a Harvard Business Review report5. With 57% of companies reporting their intention to have integrated, multi-source analytics in place in the next two years6, there is a push to incorporate more scientific, evidence-based practices in the people-functions in our businesses. Yet, currently only 14% of businesses have data to show the business impact of their assessment strategy7.

Which metrics matter most? Retention? Customer or patient satisfaction? Production or sales volume? Both HR and L&D need to have a clear understanding of where the business, and the C-Suite, are focused. Once it is clear what outcomes have the biggest impact on the viability of the organization, HR and L&D can partner to ensure assessment data is being leveraged to the fullest, both pre- and post-hire, to achieve those objectives and show, in financial terms, the success of their efforts toward recruiting, retaining, and developing a high-performing workforce.

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