A significant number of companies worldwide use some form of assessment centre methodology to evaluate candidates for recruitment, development and promotion – and most seem satisfied with the process. But is that confidence misplaced? Recent studies suggest it may be.
First, a definition: An assessment centre is a methodology (not a location) in which participants are run through a variety of job-related exercises while trained assessors evaluate their behaviors. Created at Harvard, implemented by German intelligence in WWI, refined by the British and Americans in WWII, and legitimized for business by IBM in the 1950s, the assessment centre has long been held in high regard by HR professionals as an unbiased way to predict candidates’ future performance.
The methodology has served well for many years. Studies between 1966 and 2007 showed an incremental validity of about .40 over other methods such as cognitive ability tests, personality assessments, and interviews. This means that about 20% of job performance could be explained by results from the assessment center. Having such a strategic window into the future for organizations has been a real advantage for their talent management processes.
But a recent meta-analysis has found the validity of assessment centers to have fallen to about .27, which ranks below the predictive value of other, less sophisticated methods. This is clearly a concern as organizations can easily spend upwards of 6,000 USD per participant and more on these types of interventions.
What is contributing to this decline? There appear to be a number of factors at work:
- Pressure to reduce costs – While organizations recognize and have benefited from the assessment centre approach and methodology, there is significant pressure to find ways to be more efficient and cost effective in their recruiting practices. This has led to corner cutting and a disregard for best practices. There has been an alarming trend in the use of “assembly line” or “off the shelf” approaches that have commoditized this valuable process.
- Unqualified assessors – More and more professionals claim to offer this type of service without having the proper credentials. And when companies try to take the service in-house, most lack the appropriate training and resources (not to mention, time) to do the job properly.
- Irrelevant competency frameworks – Talent competency models need to be refreshed. Many organizations are working off of frameworks that have been around for three or more years or they are electing to use off-the-shelf models. Either way, they need to assess whether or not the capabilities in these models are reflective of what success looks like in their organizations today and where the organization is moving strategically.
- Outdated delivery modes – Traditional methods of administering the evaluations simply do not align to the virtual, real-time nature of today’s professional jobs. Many organizations still employ a “paper/pencil” approach where participants are handed instructions for an exercise or asked to respond to a series of paper memos. Such an approach damages the relevance of the experience from a candidate standpoint.
Increasingly I see the impact of these factors in failed assessment programs and with participants who have had bad experiences and are skeptical whether they will get valuable insights from another assessment. How can organizations refresh their assessment center methodology to create a more realistic experience for candidates and gain relevant insights for their leadership development efforts? Time for a Fresh Approach.
In order to confront these challenges head on, I believe the first step is the integration of technology. Technology has become integral to today’s world of work and it is important that the setup of assessment centers capitalize on the latest advancements to create a more realistic experience for candidates. Properly applied, technology provides:
- Distributed delivery and scalability to help reduce costs
- Standardization and control to solve quality issues
- Contemporary diagnostic tools to regain relevance
Technology-enabled assessment center tools could provide a much more realistic experience – one that “feels right” to participants since it incorporates the everyday digital tools that businesses run on, such as computers, email systems, and so on. The ultimate goal of an assessment center should be to mirror a “day in the life” of the target role from the participant’s perspective.
Another important step is to conduct a proper job analysis to define the key success factors to be measured during the assessment center. Simply electing to go with an off-the-shelf assessment or standardized benchmark is a recipe for irrelevant results. To reliably predict something as complex as human behavior it is imperative to thoroughly analyze what “success looks like” in the target role within the organization. High performance is organizationally specific … meaning that the success criteria for a position in one organization may be very different from the same position in another company (in my career the consultants joining a top consulting firm, would miserably fail to join another top consulting firm, even in similar functional expertise). This seems to be the fundamental issue with leveraging a standardized benchmark for talent assessment.
For an organization get the most from its investment in assessment center methodology, consider the following:
- Ensure your benchmark for success is relevant and up to date by doing a thorough job analysis on the target role
- Use exercises that reflect today’s world of work and have the proper integration of technology and virtual business challenges
- Deploy tracking mechanisms that allow you to correlate the results of the assessment with on-the-job performance and continually improve the process over time (Definitely looking forward to experiment on this one)
If you decide to engage an assessment provider, determine how they are able to ensure the proper discipline is applied in all steps of the assessment process from job analysis and success profiling, to administration and evaluation, through to feedback and coaching. Ask yourself: is the process truly being fitted for my organization? This is critical for effective decision-making and impactful results for the individual and the organization. Taking a shortcut on any of these key steps will impact the quality and validity of the outcome.
I believe that, fundamentally, the assessment center methodology is still sound and can be a powerful predictor of future performance. But it requires an approach that is customized to your organization’s competencies and culture … uses technology to drive relevance, scalability, and standardization … and is guided by experienced assessment professionals to yield the best results.
Is your organization using assessment center methodology? What has been your experience? How are you handling the challenges?