Psychometric Testing,Saville Wave,Saville Consulting,Predicting Performance,Predicting Cultural Fit,Measuring Motive and Talent

Issue Date:

08/07/2008

Source:

Laureoli International

Link:

www.laureoli.com

Author:

David Haskell

Whilst the global economy continues to slow, increases in salaries, for new hires, continues to be a concern. This is no surprise, even in the face of a decreasing number of opportunities circulating in the job market, as top talent continues to be in great demand and the shortage remains.

However, with the increase of employee costs, the need to increase the probability of success, and return on investment, also escalates. Subsequently the impact and consequences of hiring someone incompatible becomes more serious, the damage more severe and the after effects of having to replace a mistake very costly.

So what measures can be taken to more accurately predict that a new hire will prove to be a top performer and reward the organisation with outstanding performance?

Selection Criteria

Criterion based selection goes back thousands of years, but the concepts of Scientific Management, Job Analysis and ‘Competencies’ are relative modern, having all been introduced sometime in the last century.

In tandem with the developments in selection criteria, have been the methods in which such criteria is measured, including the Critical Incident Interview Technique, Assessment Centres and Psychometric Testing, all making great leaps in the last 100 or so years. The main drivers behind these advancements are the increasing need to make more accurate and predictive selection and the way in which this is achieved is by increasing the levels of validity and reliability in the selection criteria and the method in which they are measured.

Validity & Reliability

Validity & Reliability are words that are often associated with psychometric questionnaires but are not so often associated with the Interview. The reason for this is that both reliability and validity studies are expensive and time consuming processes and practically impossible to do on an individual basis. Everyone adopts differing styles in their interviewing techniques and asks different questions. Even if two people ask the same question, the way in which it was asked would have an impact on its validity and reliability, or in this case – the response.

However, if we were to be able to measure the validity & reliability of an interview we would no doubt see some worrying results.

Visibility

Typically, during an interview, we can only assess what is in front of us – what is visible for us to probe and poke. Spencer and Spencer’s (1993) Iceberg Model illustrates that, like an iceberg, only a small percentage of an individual is visible. It is arguable to comment on the percentage and there are many references that range between 33% down to 10% visibility.If this is the case, even with the most experienced of interviewers, you would have a 1 in 3 shot at correctly assessing your candidate through interview alone.

The Iceberg Model was preceded, in 1982, with Boyatzis’ theory stating that, two main groups of competencies exist, Threshold and Differentiating. Using the Iceberg Model with Boyatzis’ theory, it would be fair to assume that each group of competencies, whether Threshold or Differentiating, would have a differing level of predictability either above or below the water-line of the Iceberg. For example – Technical Savvy, as a competency, with a typical definition, would be more predictable whilst measuring skills and knowledge than say, Managerial Courage, or Learning Agility. Therefore, it would be easier to measure Technical Savvy as a competency, through interviewing, than the latter two.

The competencies that are predominantly predictable, using the visible characteristics of the Iceberg Model, may more likely fall into the category of Threshold Competencies, as these are the competencies that are generic to most organisations employing a similar role. These competencies are described as ones that contain essential characteristics needed to achieve average or acceptable performance.

The alternate form of competency, described by Boyatzis as the Differentiating Competencies, are more likely to have a higher level of predictability by measuring what falls ‘below the water-line’. These are the competencies that distinguish a superior performer from an average one, and are consequently more difficult to find and even more difficult to measure during an interview.

Why is it then that we continue to rely upon an inconsistent method of assessment and measurement to select high stake individuals, especially when that method of assessment has been shown, time and time again, to be incapable of measuring what we really need to measure?

So, what other reasonable measures can be taken to ensure we are hiring someone with the appropriate competencies and characteristics that we are looking for?

Alternatives

There is no single best method of recruitment, no one shoe that fits all situations. The best approach to selection is a combination of methods that will most accurately predict future performance in the competencies that you will have defined as important.

As previously suggested, while interviews are very useful for garnering information on relevant experience, as well as some of the more visible elements of behavioural style such as ‘self confidence’, they are not so good at assessing problem solving ability, organisational skills and strategic thinking. Indeed, a good ‘interview’ manner can mask some important limitations which could ultimately be ‘showstoppers’ on the job.It is commonly accepted and proven, that an effective method of assessing competencies with predominantly ‘below the water line’ characteristics is an assessment centre. The measurement of say, ‘Time Management’ or ‘Prioritising’ can be more effective through the administration of a ‘Work Sample’ exercise.

When we look at how effective an appropriately constructed assessment centre is, in comparison to a stand-alone interview, we see just how ineffective the interview is, as a sole method of selection. Yet, due to time, cost and expertise constraints most of us tend to steer away from the assessment centre.

The personality assessment has undergone radical evolution and changes during the 20^th century, from the defining of the Big 5 personality factors & MBTI typology to the introduction of alternate forms such as NEO PI-R, 16PF, 15FQ+, OPQ32 as well as numerous others. Still, whilst the Global 500, when recently surveyed, said that 73% of them use such products, few of them use as an integral cog in their recruitment mechanism. The reasons for this vary from lack of expertise, lack of faith (knowledge) and lack of funds. These aforementioned tools will offer a means to measure either values, motives, traits and in some cases environmental and cultural preferences.

The reliability and validity results of all (respected) psychometric instruments are well documented and published. These figures should be available on the internet or through the test publisher.

Return on Investment

Most organisations are prepared to part with a substantial sum of money, in recruitment fees, for a consultancy or agency to source the perfect candidate. The professional fees associated with executive search and recruitment vary greatly, but are typically within the range of 20-35% of an individual’s annual compensation. For someone with an annual compensation totalling S$150,000 this could potentially mean a fee in excess of S$50,000. For this fee you will have been presented a short-list of suitably qualified and experienced individuals that have satisfied the ‘above the water-line’ characteristics that have been deemed as a pre-requisite.

But what about the other 70-90% of the criteria? Assigning a suitably qualified professional to administer a personality assessment, in addition to the normal hiring interviews, will enable employers to vastly increase the reliability and validity of their selection process.

Saville Consulting recently launched their powerful Wave® range of personality tools in Asia Pacific. Already applauded in Europe and North America, these tools have exceptional validities, with published predictive ability greater than any other currently available. One of the interesting reasons for this is that Wave measures both Motives and Talent and combines these two essential ingredients to maximise the prediction of performance. In addition, it provides good insight into organisational culture and environment fit, an increasingly important variable in successful placements.

Laureoli International are certified administrators of Saville Wave. For more information visit www.laureoli.com

Predicting Return on Investment from New Hires