The Value of Employee Assessment (Part 5 of 5)

So... this will wrap up my five-part series on the Value of Assessment.  I thought I'd leave you with a few summary thoughts. 

As the business environment becomes more competitive, people, not processes and technology, increasingly become the differentiators. As a result, it is more important than ever to implement the best possible assessment systems in order to select, retain and develop talented people.

The value of assessment in this kind of environment is that it gets the "right people on the bus" and the "wrong people off," thereby decreasing the costs associated with bad hires and increasing revenue potential as a result of talented employees. In addition, assessment plays a vital role in employee development as it streamlines the development process by targeting KSAs in need of development.

At the individual level, assessment systems increase the probability of job fit, provide a road map for development, and open the door for rewards and advancement.

Finally, HR needs to become more strategic in influencing the organization's decisions. Assessments can help in this regard because they quantify the value of HR programs and services. In order to demonstrate true value, HR needs to measure the impact of programs on the key metrics driving organizational success.

As always, I welcome your thoughts... let us know if you have any opinions or have a new perspective you can add to this topic!

The Value of Employee Assessment (Part 4 of 5)

If you’ve been tracking this series of posts, you know we’ve covered some historical perspective on the use of assessments, and spent a couple weeks digging deeper into the world of employee selection.  This week, we’ll shift our focus to a brief discussion of how assessment is being used to support ongoing employee development.

While people typically associate the term "assessment" with selection, organizations are increasingly using assessments for developmental purposes. Here are a few of the ways assessments are adding value:

• Ensure employees have acquired the necessary knowledge and skills during training. Organizations spend about $60 billion on training each year, and a modest investment in assessments can significantly leverage those resources. The data are also very helpful in fine-tuning training programs.
• Better target training resources. Rather than assuming that all employees need the same training, assessments can help identify the specific areas where training would be most beneficial on an individual basis.
• Promote continuous learning and development. Good assessment programs periodically measure employees' capabilities and provide specific feedback to help them further develop. Some assessments measure the degree to which knowledge and skills are actually being applied on the job, which, of course, is the real point of development.
• Empower managers. Managers are just as responsible for developing the talent pools in their organizations as they are for accomplishing operational goals. Unfortunately, while they get a lot of information pertaining to how they're doing on operational goals, they get no information on the knowledge and skills of their people. Good assessment programs can provide this valuable data.
• Improve organizational effectiveness. For example, a large financial institution Censeo works with administers a product knowledge test every six months to all of its employees who interact with customers. Follow-up research showed very high relationships between product knowledge and a variety of financial measures. This propelled the organization to an even greater commitment to employee development.

Increasing the Value of Assessments in Development

This graphic illustrates the strategies involved in increasing the value of assessments.

The main point relevant to this discussion is how assessments can be used strategically to build a performance-oriented organizational culture. Here are a few suggestions on how to accomplish that:

1. Understand the business drivers and strategies of the organization. Examine what the organization is trying to achieve and what metrics will be used.
2. Identify the activities to be performed and the KSAs employees need to carry out the strategies. Set performance targets and then measure proficiency
   on the critical KSAs using appropriate assessments.
3. Assess the gaps between actual performance and set targets, and then implement performance feedback sessions in which employees and their managers agree on the development activities necessary for building capabilities linked to the organization's strategies.
4. Once employees have gone through training and other developmental activities targeted to improve knowledge and performance, measure their acquired knowledge and skills to ensure learning took place.
5. Finally, after an appropriate interval, measure the effect of the assessment process and all of the developmental activities on the organization. Did the metrics important to the organization significantly improve? Were customers more satisfied? Were employees more content in their jobs? The process is a continuous loop, as all the data should be used to refine the business strategies, required KSAs, targets, etc.

From the employee's perspective, this performance-oriented system ensures that their development is focused on the things that matter — things that will help them do their jobs better and faster, possibly opening the door to greater rewards and faster advancement. The value of assessment to the organization is in the cost savings and productivity gains from a targeted development process. Giving employees exactly what they need in development when they need it will make the organization that much more effective.

The Value of Employee Assessment (Part 3 of 5)

Last week’s post made the point that including assessments in the selection process adds value. How much value depends on several actions you can take, and I’ll outline a few of these best practices in this week’s post.

1. Success profile. Build an accurate profile of the job by specifying the KSAs and personal attributes most important to success. Understand the goals of the organization and how they impact the jobs being staffed. For example, what skills are critical to the organization today, and how will that change over the next few years?

 

2. Selection tools. Based on the success profile, choose the selection tools that will provide the data needed to make sound hiring decisions. With respect to assessments, decide whether you should obtain good, valid tools from a vendor or develop your own. Aim for more assessments rather than fewer. Cost-benefit studies consistently show that even if a selection tool only marginally increases predictive validity, it will yield a very high ROI.

 

 

3. Selection process flow. Organize the tools in a logical way that will be effective, efficient and reduce costs. The graphic below illustrates the "selection funnel" approach to selection.

 

Assessments are typically very fast and relatively inexpensive. Tools that are fast and low cost are used early in the process to screen out less qualified candidates. The more time consuming and costly tools, such as interviews and assessment centers, are used later in the process.

 

4. Administration. Ensure that consistent practices are followed during the selection process, particularly with respect to how assessments are administered. Inconsistent administration can lead to lower utility and legal problems. Read and carefully follow the instructions in the manual.

 

5. Adverse impact. Examine whether or not the assessment adversely impacts protected groups. (Is the minority group selection ratio less than four-fifths of the majority group's selection ratio?) This is more often found in instruments measuring reasoning or cognitive ability. Use the instrument if it's a valid predictor of job performance, and a better, less adverse instrument cannot be found.

 

 

6. Follow-up validation. After some time on the job, collect performance-related data (as well as other indices like turnover and employee attitudes) and compare it with scores from the assessment. Use the results to make any necessary adjustments to the selection process.

 

With next week’s post, I’ll shift gears a bit and focus on the employee development side of things.