Assessments 2013: Finding the Perfect Match (by the Aberdeen

Assessments 2013: Finding the Perfect Match

April 2013

Mollie Lombardi

~ Underwritten, in Part, by ~

Assessments 2013: Finding the Perfect Match Page 2

© 2013 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Executive Summary In the past several years, assessments have evolved into the critical element to a successful talent strategy. Whether used as a top of the funnel screen for incoming candidates, an in-depth simulation to test the capabilities of a leadership candidate, or personality type assessments designed to guide team-building, assessments play an important role in many critical talent decisions. This report, based on data from 251 organizations gathered in February and March 2013, looks at how organizations use assessments as part of their talent strategy to achieve outstanding business results.

Best-in-Class Performance Aberdeen used the following three key performance criteria to distinguish Best-in-Class (BIC) companies:

• 71% of employees received rating of “exceed” on last performance review

• 70% of key positions have at least one willing and able successor identified

• 12% year-over-year improvement in hiring manager satisfaction

Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics, including:

• Clearly defined process to assess candidates and applicants

• HR and line of business management collaborate to ensure that assessment content truly addresses business needs

• Support and buy-in for assessments from senior executives and organizational leadership

• Hiring managers are trained to use the output of assessments

Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must:

• Utilize assessments as a source of objective data to inform decisions at all points in the talent lifecycle, from hiring to development to retention.

• Create individualized action plans based on assessment output.

• Align assessment use to the specific purpose for which it is intended, and ensure that both employees and managers understand how and when assessment data should and should not be used.

Research Benchmark

Aberdeen’s Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

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Table of Contents Executive Summary ....................................................................................................... 2

Best-in-Class Performance ..................................................................................... 2 Competitive Maturity Assessment ....................................................................... 2 Required Actions ...................................................................................................... 2

Chapter One: Benchmarking the Best-in-Class .................................................... 4 Business Context ..................................................................................................... 4 The Maturity Class Framework ............................................................................ 5 The Best-in-Class PACE Model ............................................................................ 6 Best-in-Class Strategies ........................................................................................... 7

Chapter Two: Benchmarking Requirements for Success ................................. 11 Competitive Assessment ...................................................................................... 13 Capabilities and Enablers ...................................................................................... 14

Chapter Three: Required Actions ......................................................................... 20 Laggard Steps to Success ...................................................................................... 20 Industry Average Steps to Success .................................................................... 20 Best-in-Class Steps to Success ............................................................................ 20

Appendix A: Research Methodology ..................................................................... 22 Appendix B: Related Aberdeen Research ............................................................ 24 Featured Underwriters .............................................................................................. 25

Figures Figure 1: Pressures Driving Assessment Efforts .................................................... 4 Figure 2: Importance of Assessment Data for Key Decisions ............................ 5 Figure 3: Assessment Strategies ................................................................................. 8 Figure 4: Impact of Best-in-Class Assessment Strategies ..................................... 9 Figure 5: Elements Used in Promotion Decisions ............................................... 10 Figure 6: Importance of Pre-Hire Assessment Output ...................................... 17 Figure 7: Importance of Vendor Selection Criteria ............................................ 19

Tables Table 1: Top Performers Earn Best-in-Class Status.............................................. 6 Table 2: The Best-in-Class PACE Framework ....................................................... 7 Table 3: The Competitive Framework ................................................................... 13 Table 4: Types of Assessments used in the Hiring Process .............................. 15 Table 5: The PACE Framework Key ...................................................................... 23 Table 6: The Competitive Framework Key .......................................................... 23 Table 7: The Relationship Between PACE and the Competitive Framework ......................................................................................................................................... 23



Chapter One: Benchmarking the Best-in-Class

Business Context Despite growth in the use of post-hire assessments, in today’s competitive talent marketplace, organizations still predominantly use assessments to improve their recruiting efforts. Even though hiring remains the primary use-case for many assessment strategies, top performing organizations know they can’t expect to simply hire all the talent they need. These organizations extend their use of assessments to unleash the talent within their organizations and help develop the next generation of leaders from within. No matter where in the employee lifecycle assessments are used, the goal for companies is to match the right individual with the right opportunity that will accelerate their own growth as well as business results.

Data Driven Decisions The primary pressures driving organizations to use assessments are all about getting more information to improve the speed and quality of decision-making, particularly when it comes to candidates in the recruiting process (Figure 1).

Figure 1: Pressures Driving Assessment Efforts

Source: Aberdeen Group, March 2013

This emphasis on hiring is unsurprising, given that Aberdeen’s September 2012 Strategic Talent Acquisition report found that 55% of respondents cited the lack of key skills in the marketplace as one of their top two talent acquisition pressures. This was followed by 47% who cited the inability to source enough qualified candidates. These critical shortages make tools that

Fast Facts

√ 87% of Best-in-Class organizations use some form of assessment data as part of their criteria for promotion to leadership development roles (vs. 73% of All Other organizations)

http://www.aberdeen.com/Aberdeen-Library/7824/RA-strategic-talent-acquisition.aspx



allow organizations to find, assess, and select the best candidates extremely important to ongoing success. But these critical shortages also point to the need for organizations to increasingly look within to find the talent they need. When asked to rank the importance of assessment data in making key talent decisions, hiring decisions topped the list, but the next three most important decision points were all about developing skills and leadership capability from within, and identifying internal candidates for future leadership positions (Figure 2).

Figure 2: Importance of Assessment Data for Key Decisions

Rated on a scale of 1 to 5 where 1= little importance and 5 = critically important


To achieve continued organizational success, organizations must balance their use of assessments in the pre-and post-hire process to ensure that they match internal and external candidates for the right opportunities for individual success and support of organizational goals.

The Maturity Class Framework Aberdeen used three key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations — the same criteria used in Aberdeen’s assessment research since 2010. Only organizations currently using assessments were benchmarked.

• Employee performance is defined as the number of employees who received a rating of "exceeds expectations" as of their latest performance review. This is an indicator of how well organizations align individuals’ efforts with the work the organization expects of them.

• Bench strength is the number of key positions for which at least one ready and willing successor has been identified. This is an indicator of



how well organizations identify and develop the next generation of talent, based on future needs.

• Hiring manager satisfaction is defined as the degree to which hiring manager satisfaction with new hires has improved over the past 12 months. This is an indicator of how well the recruiting and staffing organization matches the skills, behaviors, and talents of new employees to the needs defined by the hiring manager.

These three elements in combination indicate how organizations use assessments in the pre-hire to improve fit, and in the post-hire to deliver near-term results and plan for future needs.

Table 1: Top Performers Earn Best-in-Class Status

Definition of Maturity Class Mean Class Performance

Best-in-Class: Top 20%

of aggregate performance scorers

71% of employees received rating of “exceed” on last performance review 70% of key positions have at least one willing and

able successor identified 12% year-over-year improvement in hiring manager

satisfaction

Industry Average: Middle 50% of aggregate

performance scorers


able successor identified 6% year-over-year improvement in hiring manager

satisfaction

Laggard: Bottom 30% of aggregate

performance scorers


able successor identified 1% year-over-year decrease in hiring manager

satisfaction


The Best-in-Class PACE Model Using assessments to find and develop the talent that will allow the organization to execute business strategy effectively requires a combination of strategic actions, organizational capabilities, and enabling technologies that can be summarized as follows:

• Utilize assessments as a source of objective data to inform decisions at all points in the talent lifecycle, from hiring to development to retention.

• Create individualized action plans based on assessment output — it’s not enough to simply assess, organizations must also act upon the insights that assessments provide. For example: providing interviewers with targeted questions based on pre-hire assessment findings, or the



development of personalized development plans based on post-hire assessments.

• Align assessment use to the specific purpose for which it is intended, and ensure that both employees and managers understand how and when assessment data should and should not be used.

Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers The need for

objective data to ensure that the best candidates are hired / promoted

Create more targeted individual development plans based on assessment output Build a competency

framework to assess against for selection, placement, and promotion decisions

Clearly defined process to assess candidates and applicants Support and buy-in for

assessments from senior executives and organizational leadership HR and line of business

management collaborate to ensure that assessment content truly addresses business needs Employees understand

how assessments are conducted and interpreted Hiring managers are

trained to use the output of assessments

Behavioral-based / Personality type assessments (94% BIC Adoption) Critical thinking / Cognitive ability

assessments (74% BIC Adoption) Multi-rater / 360-degree assessments

(74% BIC Adoption) Competency model libraries (58% BIC

Adoption) Assessment portal (a platform designed

for the internet to improve accuracy and test security) (48% BIC Adoption) Simulations (46% BIC Adoption)


Best-in-Class Strategies Organizations achieving the greatest levels of success through their assessment efforts have some specific strategies in place that delineate the role of assessments in their overall talent strategy. Chief among these is the use of assessment data to drive individualized development, the creation of a competency framework to guide objective decisions at all stages of the employee lifecycle, and the ability to target development to the individuals and capabilities most required by the business (Figure 3).



Figure 3: Assessment Strategies


The latter two of these strategies go hand-in-hand. Having a competency framework really means having a language by which an organization can describe the skills, knowledge, and capabilities required for specific roles and at specific levels of the organization. By utilizing a consistent set of competencies, organizations can set clear expectations between hiring managers and recruiters during the hiring process, as well as between managers and the individuals on their teams regarding what is expected at each stage of the employee’s development. This common language inherently supports the strategy of increased alignment between development activities and the skills and knowledge required by business strategy.

Where Best-in-Class organizations most clearly differentiate their assessment strategies is in the area of development planning. Best-in-Class organizations are 36% more likely to have a strategy for creating targeted individual development plans based on assessment output (60% vs. 44%). This is a critical strategy, because while organizations rely heavily upon assessments in the hiring process, to really be effective assessments must also inform an individual’s path after they are brought into the organization.

Using assessment data to inform development plans also targets development. Both skill-based and behavioral-based assessments can inform development planning, helping to deliver the right content through the right channel to have the greatest impact on an individual. Currently, 87% of Best-in-Class organizations use assessment data as part of their criteria for promotion to leadership roles (vs. 73% of All Others). Finding the right fit in hiring is just the first step for successful organizations. To achieve Best-in-Class results, organizations must also find the right match when it comes to developing the next generation of talent.



Best-in-Class Assessment Use Makes a Difference Achieving Best-in-Class results from assessments involves far more than simply purchasing an assessment instrument. True Best-in-Class assessment strategies involve not only selecting the right tools, but integrating them with the rest of the organization’s talent strategy to guide and inform decision-making throughout the employee lifecycle. However, Figure 4 illustrates why making the effort to implement Best-in-Class assessment strategies is worth it. These organizations achieve double-digit gains over their counterparts in their ability to achieve organizational goals and execute business strategy, hire individuals who can get up to speed quickly, and improve the overall engagement of their entire employee base.

Figure 4: Impact of Best-in-Class Assessment Strategies


The following sections of this report will explore how organizations implement the capabilities required to support their use of assessment tools to achieve this level of performance.

Aberdeen Insights — Strategy

Aberdeen’s research has shown, year-over-year, that assessments are a valuable tool in making many types of talent decisions. But assessments cannot exist in a vacuum. Organizations getting the most out of their assessment investment use them as one voice in the process that provides objective data to guide decision-making. As noted above, 87% of Best-in-Class organizations use assessment data as part of their criteria



Aberdeen Insights — Strategy

for promotion to leadership roles (vs. 73 % of All Others). But these organizations also include insights from the individual themselves, their managers, and even their clients and customers (Figure 5).

Figure 5: Elements Used in Promotion Decisions


Best-in-Class organizations indicated that they were able to fill 58% of their management level or key strategic positions with internal candidates, as compared to 34% of All Others. This is a significant advantage at a time when competition is fierce for leadership talent in the external marketplace. Not only is it important to note that these top-performing organizations take such a multifaceted view when making promotion decisions, it’s also important that they are more likely to take into account the desires of the individual and feedback from sources outside the company. When it comes to retaining high potential talent, understanding the desired career path of highly valued individuals can be critical to ensuring a continued match between an employee’s ambition and the organization’s path for them. And it’s also important that not only are potential future leaders doing all the right things to meet internal expectations, but to understand the impact they have on customer and client goals. Understanding and predicting future potential is not always easy, but organizations achieving the highest level of results are stacking the deck in their favor by using objective assessment data as well as these three important perspectives.



Chapter Two: Benchmarking Requirements for Success

The use of assessments in hiring, development, and succession decisions plays a critical role in organizational ability to build a sustainable talent pipeline.

Case Study — La Quinta

La Quinta Inns & Suites owns, operates, and provides franchise services to more than 835 locations across North America. As an operator and franchisor of hotels, La Quinta has 8300 corporate employees. La Quinta franchisees have an additional 6000 employees. As a business that depends on delivering an amazing customer experience every day, La Quinta knows that hiring and retaining the best staff is essential to its success and that of its franchisees. In 2009, it began a process to identify and communicate the brand’s Core Values and develop tools to help sustain and improve performance by improving the selection process for both field management roles — general managers and assistant general managers — and front desk employees — the most customer-facing role within the organization. Assessments are at the heart of this process to help them select and retain top talent.

To begin this journey, the organization started with an effort to define their culture and understand the values and characteristics that were present among their top performers. “We knew this had to be part of a bigger effort within the organization, one that included our culture as well as the La Quinta customer experience,” said Mikki Hughes, vice president of talent acquisition and employee relations. Using this insight, La Quinta then developed selection and hiring tools to help them align talent with this organizational culture. As part of this process, they chose to implement assessment tools that would help them both screen applicants, produce guidance for hiring managers, and help them in the onboarding and ongoing development of their leaders. The program began in 2012 with a pilot for the front desk staff in which every job shift for every role was observed and evaluated to understand exactly what skills and capabilities were required. Given the nature of the hotel business, job role definition was not enough as someone who has the same job in a different shift performs very different activities. Daytime front desk staff spends the bulk of their time checking guests in and out and handling guest requests; whereas, nighttime front desk staff are often doing paperwork and accounting activities during these quieter hours.

Once the skills and capabilities were defined, they were matched with assessment questions that would help evaluate applicants for these roles. In addition to scaling capability questions, they also asked questions to get at the heart of their organizational core values. Once these values were understood, they were able to translate them into competencies

Fast Facts

√ Best-in-Class organizations are more than 3 1/2 times as likely as All Others to utilize an assessment portal for the delivery of assessments

√ Best-in-Class organizations are 63% more likely than Laggards to ensure that HR and line of business management collaborate to make sure that assessment content is truly addressing business needs




that could be assessed for, things like teamwork, pride, and resiliency. Working with a solution provider they were able to build an assessment that looked for these competencies that aligned with their organizational goals. “One of the most important things we also looked for was an assessment tool that not only gave us insight on the applicants, but helped hiring managers make decisions,” said Hughes. “The decision-maker for front desk workers is a manager who runs a hotel and also has hiring responsibility, so supporting them was paramount.” An important part of the assessment output for this role was an interview guide that hiring managers use in the interview process. After selecting and implementing the Assessment Tool at the corporate level, La Quinta made the same tool available to its franchisees to assist in hiring their own employees and trained franchise owners and general managers in their use.

The first year results of the program were impressive. While the entire corporate organization experienced a 3% increase in turnover among all hourly employees, turnover at the front desk decreased by 10%. And among individuals who were hired either without going to the assessment, or who the assessment recommended not to hire, turnover was at 50%. These metrics give a clear indication that the insight and guidance provided to the assessment process was helping the organization not only hire better talent, but retain it as well.

For the properties’ general manager and assistant general manager roles, assessments also become an important part of the process. Given the nature of these roles, the assessment tools are more in-depth than those used for the front desk and include things like simulations of real-life scenarios managers might face on the job. For company owned hotels, these hires are also made through the corporate talent acquisition process, and the assessment results are a part of the candidate presentation to the hiring manager at each company-owned property. The assessment output not only includes interview guides for the hiring manager but also includes reports to guide ongoing development planning, which is used both during the onboarding process and for ongoing learning and development. Once candidates accept an offer and join the organization, they spend three weeks in on-site training at a different property than the one they will be assigned to, and their trainers receive a full debrief on the assessment results so they can tailor the initial training process to be most effective for each individual. This combination of assessments, onboarding, and development has resulted in an overall 5% decrease in general manager turnover.

Moving forward, La Quinta plans to continue to expand its use of assessments at other points in the hiring process and for other roles. They have already begun to build assessment questions at the front end




of their application process to screen out individuals who did not fit their requirements for aspects like safety and security. La Quinta is working quickly to expand the availability of assessments tools for room attendants and encourage wider use of all the assessment tools by franchisees. “Many of our franchise owners have embraced the assessment program and those that have are as enthusiastic about it as we are at the corporate level,” says Hughes. “They are willing to invest their money in this assessment process because they see the value it delivers to their business.” By combining skills, capabilities, and values, La Quinta has developed tools that not only get the right people into the organization but helps ensure that they will stay and grow with the brand going forward. Assessments are a critical part of the talent decision-making process and deliver notable results to the business — in this case, higher quality and highly committed employees.

Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of the appropriate tools and the effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics.

Table 3: The Competitive Framework

Best-in-Class Average Laggards

Process Clearly defined process to assess candidates and applicants

85% 75% 54%

Organization HR and line of business management collaborate to ensure that assessment content truly addresses business needs

76% 65% 44%

Knowledge

Hiring managers are trained to use the output of assessments

65% 61% 40%

Employees understand how assessments are conducted and interpreted

68% 56% 46%



Best-in-Class Average Laggards

Enabling Tools / Technologies

Assessment tools and technologies currently in use

94% Behavioral-based / Personality type assessments 74% Critical

thinking / Cognitive ability assessments 74% Multi-rater

/ 360-degree assessments 58%

Competency model libraries 48%

Assessment portal 46% Simulations




Competency model libraries 19%

Assessment portal 31% Simulations




Competency model libraries 2% Assessment

portal 23% Simulations

Performance Organization reviews/updates its assessment strategy at least annually

62% 27% 29%


Capabilities and Enablers An effective assessment strategy has several critical parts. Not only must organizations select an appropriate and scientifically valid assessment instrument, they must carefully match it to the needs of the business and the stage in the employee lifecycle when it will be used. Organizations must also ensure that both employees and leaders understand how assessment data can and should be used, and provide guidance when making decisions. When the right tools are applied in the context of the right strategy, assessments can be a powerful method organizations use to build and sustain a powerful talent pipeline that will help them execute on business strategy today and into the future.

Process The vast majority of Best-in-Class organizations (85%) indicate that they have a clearly defined process in place to assess candidates and applicants. Clearly among top performers the use of assessments data to help guide the hiring process is nearly a given. These organizations are also 57% more likely (85% vs. 54%) as Laggards to indicate they use assessments in the hiring process. But assessments can be used at multiple points in the hiring process. Some assessments are appropriate for use as top of the funnel skills training to help make sure that the right candidates enter the hiring process. Some are better suited to understand how an individual may handle



various customer or managerial scenarios and are best used when the slate is down to a few key candidates.

As in previous years, Aberdeen looked at four broad categories of assessments and their use throughout the talent lifecycle at different levels of the organization. The data, presented in Table 4, shows that basic skill assessments become less important as you move up the organizational hierarchy, but tools that look at the key drivers of behavior and how individuals may react in given scenarios become much more important. (For this study the following assessment type definitions were used: basic tests — skills and abilities, cognitive; multi-dimensional or whole person assessments — personality, behavioral; high stakes assessments — in-depth, simulation-based, applying experiences and knowledge; and motivational assessments — to identify key motivational drivers.)

Table 4: Types of Assessments used in the Hiring Process

College hires

Entry level employees

Individual contributors

First-level managers

Mid-level managers Executives

Basic tests 50% 73% 53% 46% 36% 26%

Multi-dimensional / whole person assessments

34% 45% 56% 69% 70% 66%

High stakes assessment

12% 12% 14% 33% 59% 64%

Motivational assessments

28% 34% 46% 56% 65% 61%


It is critically important that the appropriate assessment type be used for the right level of candidate, and that the output is used appropriately. As noted at the end of Chapter One, assessment data must be used as a voice in the process, and is not always intended to give a yes or no answer. While a pre-hire skills check may be an appropriate gate for entering the interview process, a motivational assessment is not. Simply using an assessment tool will not result in the desired outcome; they must be used with a well-articulated purpose in mind.

Organization Because alignment between business needs and the type of assessments used is so important, it makes sense that Best-in-Class organizations are 73% more likely than Laggards (76% vs. 44%) to ensure that HR and line of business management collaborate to make sure that assessment content is truly addressing business needs. It does an organization no good if the assessment tools they have in place find individuals that do not possess the right skills or qualities required by the business’s strategy. While even



among Best-in-Class organizations HR leadership tends to be the primary influencer of assessment provider decisions, top performers are also 32% more likely than All Others (33% vs. 25%) to indicate that line of business leaders are one of the top three primary influencers of these decisions. The instruments selected, and the solution support that surrounds it, can be critical to assessment success. Both HR and line of business leaders must have a clear understanding of what the assessment is designed to do, and how the output will be integrated back into business decision-making.

Knowledge Management The key to getting the most out of an assessment strategy is to assess and then act. Simply understanding whether or not an individual possesses a certain skill, capability, or particular knowledge is not always in and of itself useful. This data must be put in context with the job role requirements, business needs, and organizational culture. Utilizing assessments during hiring can be useful, but they only achieve full impact when hiring managers understand how to use the data. Best-in-Class organizations are 63% more likely than Laggards (65% vs. 40%) to ensure that hiring managers are trained on how to use assessment output. This type of training not only helps improve decision-making, but also adoption. When hiring managers understand the value of pre-hire assessment data, they’re more likely to support and fund its use. In conversations with many Best-in-Class organizations, one common success factor was that top-performing organizations were able to link the outcomes of pre-hire assessments to ongoing employee performance. For example, they could correlate particular scores on an assessment among newly hired salespeople to their success on key metrics like quota attainment. Helping managers understand how assessment data will impact their ability to accomplish their business goals is an important step in any assessment strategy.

Top-performing organizations also use pre-hire assessment outputs to help managers not only select, but onboard top talent more effectively. As Figure 6 illustrates, top performing organizations place much greater value on insights around work style and motivation, which can be an indicator of organizational fit, as well as a guideline for the manager in the employee’s first days and weeks with the company. If the manager knows that their new hire learns best by doing, they can be more conscious of providing opportunities for that individual to try things on their own during training. Similarly, if the manager knows that a particular individual is motivated by public recognition, they can seek out opportunities to recognize them.



Figure 6: Importance of Pre-Hire Assessment Output


Top-performing companies also place a value on tools that help managers in the hiring decision process. In particular, interview guides that help hiring managers probe on key areas to uncover strengths or possible pitfalls during the interview process were ranked as highly valuable. Interviewing is often a skill that does not come naturally to every hiring manager, so by looking for assessment solutions that provide an assessment of the individual along with guidelines on using the data can be extremely important to achieving success.

Enabling Tools and Technologies Best-in-Class organizations use a wide variety of assessment types, including behavioral-based, critical thinking, multi-rater or 360-degree assessments, simulations, and assessment centers. They are universally more likely than All Other organizations to use all of these assessment types. But one common characteristic they also share is the use of assessment portals — an online technology platform that aids in the administration, scoring, and even the security of assessments. Best-in-Class organizations are more than 3½ times as likely as All Others to utilize an assessment portal (48% vs. 13%). An assessment portal also supports ease-of-use for candidates and employees as well as employers.

Performance Management To stay competitive, organizations must continually change. As business strategy changes, talent strategy must as well, including assessments. The previous data has already shown that it is exceptionally important for assessments to be closely linked to the needs of the business. Organizations must be sure that their assessments continue to perform as expected in two ways. First, the assessments must deliver the intended results. If a pre-



hire assessment is designed to improve new hire productivity, organizations must validate this outcome has occurred. Secondly, organizations must ensure that the outcome they seek is still the outcome desired by the business. For example, an organization operating under a strategy of growing the business by expanding current relationships would require a particular set of skills, around which an assessment strategy could be built. But conditions could change, and the business now needs to expand into new geographies and industries, requiring a new set of skills. Without continual reevaluation of the assessment strategy, an organization could risk having its hiring or development initiatives at odds with organizational strategy. Best-in-Class organizations are more than twice as likely as All Others (62% vs. 29%) to review and update their assessment strategy at least annually.

Aberdeen Insights — Vendor Selection

Organizations must take into account many variables when selecting assessments for pre- and post-hire use. This report has previously discussed the importance of linking the type of assessment to the position level, decision point, and business strategy. But what can be equally important as the assessment type, is the provider the organization works with for that assessment. Organizations are looking for assessment solution providers that have not only science and validity testing to back up their products, but can also deliver them in a way that helps the organization make the most of their investment.

Figure 7 below calls out some of the most important vendor selection criteria cited by top-performing organizations. Far and away organizations insist that their vendors provide them with reliable tools that can be validated. But top-performing organizations also want tools that help them not only understand the individual’s current capabilities, but can help them predict both performance and potential. It is always a risk to make a hiring or promotion decision, and organizations constantly seek new sources of data that will help them predict who fits a particular role or situation and improve the odds of success.



Aberdeen Insights — Vendor Selection

Figure 7: Importance of Vendor Selection Criteria


Organizations are also looking for providers that they can build a relationship with, and who can make assessments simple and easy for their candidates, employees, and hiring managers. Top-performing organizations expect high levels of customer support, ease-of-use, and support in the form of training. As earlier sections of this chapter stated, top-performing organizations enable managers to take action upon assessment data, and they need help from their vendors to do so. One of the most interesting findings was the fact that price, which is normally a top three vendor selection criteria in any human capital management technology decision, ranked last out of 16 possible vendor selection criteria among Best-in-Class organizations. It was eighth among All Other organizations. Top-performing organizations see the value far beyond price as a critical consideration when selecting a solution provider partner.



Chapter Three: Required Actions

Whether a company is trying to move its performance in the use of assessments from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements:

Laggard Steps to Success • Define a pre- and post-hire assessment process. Currently just

54% of Laggards have a process in place to assess candidates or applicants, as compared to 85% of Best-in-Class organizations. And just 67% have a process in place to utilize assessment results in succession planning, as compared to 87% of Best-in-Class organizations. Utilizing assessments throughout the talent lifecycle is a critical enabler to organizational success.

• Develop a competency model to guide hiring, development, and performance management. Competencies provide a common language through which the organization can define and evaluate talent, and provide a standard against which candidates and employees can be assessed. Laggards are 38% less likely than Best-in-Class organizations (39% vs. 63%) to have a defined competency model in place.

Industry Average Steps to Success • Use assessment data to inform development planning. The use

of assessment data does not need to stop once an individual is hired. 87% of Best-in-Class organizations utilize some form of assessment data when assigning individuals to a succession plan, as compared to just 76% of Industry Average organizations. Finding the right match is as important to development and succession as it is to hiring.

• Collaborate to ensure assessments meet business needs. Assessments are only useful if they are aligned with business strategy. Unless an organization can correlate assessment output to ongoing performance, it will never achieve the full benefit of its assessment investment. Industry Average organizations are 14% less likely than Best-in-Class organizations (65% vs. 76%) to ensure that HR and the line of business collaborate to ensure that assessments are meeting business needs.

Best-in-Class Steps to Success • Support managers in using assessment data. Successful

organizations know that managers and employees must have a clear understanding of how to utilize assessment data for decision-making. Currently just 65% of Best-in-Class organizations provide ongoing training for hiring managers and leaders to ensure that assessments are

Fast Facts

√ 85% of Best-in-Class organizations have a process in place to assess candidates / applicants

√ 63% of Best-in-Class organizations have a defined competency model in place

http://assessment.aberdeen.com/mNeWmvDzSl/index.aspx



used properly. Organizations need to support not only an evolving assessment strategy, but evolving support mechanisms to ensure that assessment data is used to its fullest advantage.

• Review and adjust assessment strategy on a regular basis. An assessment strategy is not something you set once and forget about. Just like a business strategy, it needs to evolve to meet marketplace and business conditions. Senior leadership, HR leadership, and the line of business must work together to ensure that the assessment strategy is refreshed as frequently as business strategy.

Aberdeen Insights — Summary

As organizations seek to improve business performance, they are constantly looking to find new sources of data and information that can help guide decision-making. And when it comes to talent decisions, there may be no more powerful set of tools than assessments to help guide talent decision-making throughout the employee lifecycle. To achieve Best-in-Class performance, companies must first ensure that appropriate assessments are used throughout the hiring and development process, and organizations must understand how to take action on assessment data and create individualized development plans. And assessment strategies must be continually revisited in order to ensure that they are achieving business goals. With these key points in mind, organizations can use assessments to significantly improve their overall business performance.



Appendix A: Research Methodology

Between February and March 2013, Aberdeen examined the use, experiences, and intentions of more than 250 organizations using assessments in a diverse set of industries.

Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on assessment strategies, experiences, and results.

Responding enterprises included the following:

• Job title: The research sample included respondents with the following job titles: CEO / President (14%); EVP / SVP / VP (16%); Director (21%); Manager (28%); and other (18%).

• Department / function: The research sample included respondents from the following departments or functions: HR / talent management (49%); corporate management (11%); business development, sales, and marketing (13%); operations (6%); and other (21%).

• Industry: The research sample included respondents from a wide variety of industries. Some of the larger industries represented were software (8%); IT/consulting services (6%); financial services (5%); and transportation/logistics (5%).

• Geography: The majority of respondents (73%) were from North America. Remaining respondents were from Europe (14%), the Asia-Pacific region (8%), the Middle East (2%). and Africa (2%.

• Company size: Twenty-five percent (25%) of respondents were from large enterprises (annual revenues above US $1 billion); 30% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 45% of respondents were from small businesses (annual revenues of $50 million or less).

• Headcount: Forty-two percent (42%) of respondents were from large enterprises (headcount greater than 1,000 employees); 35% were from midsize enterprises (headcount between 100 and 999 employees); and 23% of respondents were from small businesses (headcount between 1 and 99 employees).

Study Focus

Responding organizations completed an online survey that included questions designed to determine the following:

√ What assessment types are having the greatest impact on quality of hire, succession, and employee performance

√ How the consistent use of assessments post-hire influences overall organizational performance?

√ The benefits, if any, that have been derived from the integration of assessment data with other key talent processes

The study aimed to identify emerging best practices for talent assessments, and to provide a framework by which readers could assess their own management capabilities.



Table 5: The PACE Framework Key

Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures — external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management)


Table 6: The Competitive Framework Key

Overview

The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) — Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) — Practices that represent the average or norm, and result in average industry performance. Laggards (30%) — Practices that are significantly behind the average of the industry, and result in below average performance.

In the following categories: Process — What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization — How is your company currently organized to manage and optimize this particular process? Knowledge — What visibility do you have into key data and intelligence required to manage this process? Technology — What level of automation have you used to support this process? How is this automation integrated and aligned? Performance — What do you measure? How frequently? What’s your actual performance?


Table 7: The Relationship Between PACE and the Competitive Framework

PACE and the Competitive Framework – How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.




Appendix B: Related Aberdeen Research

Related Aberdeen research that forms a companion or reference to this report includes:

• Human Capital Management Trends 2013: It’s a Brave New World; January 2013

• The Rules of Employee Engagement: Collaboration, Communication and Alignment with the Business; August 2012

• Strategic Talent Acquisition: Are You Prepared to Hire the Best; September 2012

• Onboarding: The Missing Link to Productivity; May 2012

Information on these and any other Aberdeen publications can be found at www.aberdeen.com.

Author: Mollie Lombardi, Vice President and Principal Analyst, Human Capital Management ([email protected])

For more than two decades, Aberdeen’s research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That’s why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500.

As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group’s methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2013a)

http://www.aberdeen.com/Aberdeen-Library/8101/RA-human-capital-management.aspx

http://www.aberdeen.com/Aberdeen-Library/7816/RA-employee-engagement-recognition.aspx

http://www.aberdeen.com/Aberdeen-Library/7816/RA-employee-engagement-recognition.aspx

http://www.aberdeen.com/Aberdeen-Library/7824/RA-strategic-talent-acquisition.aspx

http://www.aberdeen.com/Aberdeen-Library/7888/RA-onboarding-talent-productivity.aspx

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Featured Underwriters This research report was made possible, in part, with the financial support of our underwriters. These individuals and organizations share Aberdeen’s vision of bringing fact based research to corporations worldwide at little or no cost. Underwriters have no editorial or research rights, and the facts and analysis of this report remain an exclusive production and product of Aberdeen Group. Solution providers recognized as underwriters were solicited after the fact and had no substantive influence on the direction of this report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge.

Assess Systems is an innovative SaaS and consulting company providing talent selection and people development solutions to organizations worldwide. Focusing on person-job-organization fit, our assessment-based solutions help our clients attract, select, develop and promote talent resulting in improved business outcomes. For more than 25 years, Assess Systems has assessed millions of people in a broad spectrum of industries and positions spanning 42 countries and supporting 16 languages. Our solutions include: selection process design, competency modeling, entry-level assessments, competency-based professional, management and sales assessments, hiring manager interview guides and eLearning, leadership development, 360° feedback, succession planning, executive assessment and coaching.

For additional information on Assess Systems:

12750 Merit Drive, Suite 300 Dallas, TX Telephone: 800.283.6055 Fax: 972.233.3154 www.assess-systems.com

[email protected]

http://www.assess-systems.com/




The Devine Group is a world-class assessment company that has helped over 5,000 organizations small and large. Since 1970, with innovative technologies and industry-leading predictive models we’ve helped organizations like yours screen, hire, develop, promote and retain high level performing employees.

The Devine Group psychologists, statistical analysts, organization development consultants and experienced human resource practitioners work together to create industry-leading predictive models that help companies take the guesswork out of hiring and talent management. Through The Devine Group’s assessment solutions, clients maximize returns on their human capital investments—across the employee lifecycle—while reducing their risk.

For additional information on The Devine Group:

7755 Montgomery Road Suite 180

Cincinnati, Ohio 45236 Telephone: 866.792.7500 Fax: 513.793.8535 www.devinegroup.com

[email protected]

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CPP – The people development people.

At CPP, our only job is to help you be a better people development professional and, in turn, help every employee flourish. While we’re best known for our products like the Myers-Briggs® assessment, CPP is also a group of people who can offer you the information, guidance, and support you need. We offer solutions to help you improve organizational performance and address whatever challenges you face – from team building, leadership and coaching, and conflict management to career development, selection, and retention. That’s why millions of people in more than 100 countries use our products each year.

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Telephone 2: 800.624.1765 www.cpp.com

[email protected]

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SHL is the leader in talent measurement solutions, driving better business results for clients through superior people intelligence and decisions - from hiring and recruiting, to employee development and succession planning. SHL was acquired in 2012 by CEB, the leading member-based advisory company. By combining the best practices of thousands of member companies with advanced research methodologies and human capital analytics, CEB equips senior leaders and their teams with insight and actionable solutions to transform operations.

For additional information on SHL:

SHL

555 North Point Center East, Floor 6

Alpharetta, GA 30022 Telephone: 800.899.7451 www.shl.com

[email protected]

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Documents

Assessments 2013: Finding the Perfect Match (by the Aberdeen