Attracting the right people is only one part of talent management. How they are measured against the organisation’s needs is what makes the difference between a good hire and a costly one.
Formal assessment has been a core component of talent management for more than 100 years. Assessment centres were first used in industry by telecommunications giant AT&T in the 1950s.
Much of the early work in assessment was carried out by educational and clinical psychologists, leaning heavily on testing and biographical interviews. Now, an increasing number of organisations are using more leading-edge techniques, where candidates can get as close an experience to the real job as possible. So how do organisations know which approach is most effective?
Why assessment is important
There are two main reasons why a business should invest in effective assessment techniques:
First, from a traditional HR viewpoint, it builds better employer branding, ensures a good fit, maintains the culture, and portrays the employer as fair and objective.
Second, numerous studies have shown there are massive savings to be made through the use of valid techniques. This covers not only the effectiveness of the person selected – a high performer typically outperforms an average performer by 40% – but also decreased costs associated with training and increased tenure.
What is effective assessment?
There are a range of assessment tools that are used at senior levels within organisations. These range from hour-long interviews and a few tests, through to full-blown assessment centres lasting up to a week.
Interviews are renowned for being open to all sorts of biases – not helped by the fact that often interviewers are not trained.
Also, the use of biographical interviews (which often start with childhood experiences and work up to present day) and psychometrics are going to come under increasing scrutiny under the new age discrimination law. Most psychometric tools (personality or ability) show significant age related differences in scores – a fact that many users are unaware of.
New forms of assessment
Leading-edge assessments are now built around business simulations. These are based around fictitious businesses that share the most important features of the organisation, but are in a different sector. They are designed ‘out of sector’ so that the candidates show their leadership and management skills, not their technical knowledge and ability.
For example, a financial services company might host a business simulation based in the IT sector, or a leading law firm might host one based around a global media business. Candidates could spend a day going through the simulation, which involves conducting meetings, analysing materials and financials and analyst reports. This is all set within the context that the candidate must prepare for an end-of-day strategic review with the boss.
This has a number of advantages over previous models of assessment: it allows assessors to observe actual behaviours in a situation that they can control, rather than using psychometrics, which tell you how a candidate perceives their own behaviour. In addition, candidates are assessed on a one-to-one basis, and the candidate is continually stretched because of the complexity of the tasks that builds throughout the day. In short, it looks like a ‘real’ day at work.
Research suggests that this can predict job performance at senior levels more effectively over a three-year period than more traditional methods.
How to make a start
There are five key steps to introducing effective assessment within your organisation:
Have a clearly articulated view of what a ‘good’ manager looks like in your business – both now and over the next few years. Typically, this will be a competency set, with definitions of highly effective, effective and below par behaviours.
Be clear about what assessment will be used for – promotion, recruitment, entry into the business, selection onto fast-track programmes, general development, issue-specific (remedial) development.
Make sure that everyone – from the chair down – knows what should be expected as a result of the assessment in terms of how assessments get used in decision-making.
Design the business simulation and exercises.
Identify and train assessors. This can be another string to add to a manager’s bow and we often find they get a lot from acting as assessors, which they then take back into their day-to-day work.
When it goes wrong
There are many examples of organisations not getting assessments right and the disastrous consequences that this can bring. Here are five of the common problems to avoid:
Placing too much emphasis on psychometrics – they can be used as an excuse for poor assessment practice and skills.
Letting the result of an assessment impact on the view of current performance for internal candidates.
Thinking that a one-page description of a situation equates to a role play simulation, and that it is going to be effective.
Not training assessors in interviewing and assessing.
Confusing great technical skills and knowledge with general management ability.
Effective assessment has a lot to offer a business. It can improve the quality of management, support change, and add to managers’ skills, as well as making sure the right person is in the right job with the right development. M
Top five… Most effective types of assessment
Work-sample tests 46%
Psychometric tests 18%
Online off-the-shelf psychometric tests 9%
In-tray exercises 7%
Online bespoke psychometric tests 6%
Based on panel of employers surveyed by IRS Employment Review.
Our expert
Simon Brittain is a partner and the head of assessment at business psychologists Kiddy and Partners. He specialises in executive profiling assessments, assessment/development centres and talent management issues. He is a chartered psychologist and an Associate Fellow of the British Psychological Society.
Assessment: old versus new approaches
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Old-school approach Focuses on – projecting likely behaviour; Underlying basis of assessment – clinical (abnormal) psychology; Main methods – biographical interview, from childhood to present day, psychometrics intended to provide insight into intended behaviours of candidates; Pros – relatively quick, allows candidates to talk about themselves; Cons – lack of accuracy, potential legal issues around age discrimination
Leading-edge approach Focuses on – observing real behaviour; Underlying basis of assessment – Business (normal) psychology; Main methods – Business simulations that replicate the key challenges in the role, competencies are used to describe effective and exceptional behaviour to provide a benchmark; Pros – high actual validity, good face validity, line managers can be assessors; Cons – design costs, time for managers to act as assessors
