Improve Your Staffing Strategy
How assessment centers can help.
June 16, 2011
Assessment centers have been around since World War II and about a third of employers have experimented with them, including almost all of the Fortune 500. They add important information about job candidates and therefore improve the candidate-selection processes. Although hiring outside consultants can be expensive, a new vanguard of assessment center experts housed in universities like Colorado State University can train human resources (HR) departments to develop their own low-cost assessment center programs.
Assessment centers have mid-range validity. That is, they do a better job than traditional, unstructured job interviews alone, but taken alone they are not as valid as IQ tests. But when used in combination with IQ tests and interviews they add information. Importantly, assessment centers are valid instruments that do not suffer from adverse impact and provide valuable information. For a strategic-thinking HR department, their cost can be reduced to very little.
Writing in the Interdisciplinary Journal of Contemporary Business Research (Amen, U. June 2010. “Assessment Centre as an Effective Tool to Select the Potential”),Ume Amen notes that assessment centers evolved on both sides of World War II, when they were first applied in industry at AT&T. Amen points out that they identified 85 percent of AT&T's middle managers in the 1950s. The website Psychometric Success quotes statistics that indicate that 34 percent of employers now use assessment centers for white-collar staffing and the percentage is likely to grow. Nine out of 10 employers who use assessment centers consider them to be effective. In fact, Sterling Selection reports that nearly half (48%) of United Kingdom (U.K.) companies use assessment centers.
The assessment center concept is straightforward. Job applicants, candidates for promotion or employees who might be prescribed training are given a suite of exercises and objectively assessed by trained raters who may be psychologists, line managers or specialists. Reporting survey data in the Journal of Business Psychology (Eurich, T.L., D.E. Krause, K. Cigularov, G. Thornton. 2009. "Assessment Centers: Current Practices in the United States." Journal of Business Psychology. 24:4, 387 – 407), T.L. Eurich, et al. found that three out of four (76%) assessment centers include a role-playing exercise, two out of three (64%) include a presentation exercise and more than half (57%) include an in-basket. The authors also found that just under half (48%) include a planning exercise as well as a situational interview (48%), a group discussion (43%) and one in three (38%) include a case study. Assessment centers focus on interpersonal, creativity and problem solving skills, but potentially can include dimensions like writing.
I interviewed Professor Alyssa Gibbons of Fort Collins, CO-based Colorado State University, who is an expert in assessment center research. She describes the leaderless group discussion as a group task in which no one person is told to be the leader. In observing the group the rater can see emergent leadership and teamwork:
Gibbons says that the premise of assessment centers is one of the best ways to find out whether an applicant can do a job by placing them in the job and see if they can do it. But job tryouts can be expensive in terms of applicant time and disruption to the firm's processes. An assessment center is a compromise. It is easy to know what to do in a tense or interpersonally challenging situation; it is another thing to actually do it.
There are a number of steps that should be followed, notes Gibbons. First, the HR department should perform a job analysis to determine which competencies are most important and should be assessed. Job analysis helps the assessment center's architects focus on the key situations that confront incumbents. If something is important to a CPA firm, such as the ability to work under pressure during tax season, then the HR department can create an exercise that will assess how an applicant performs under pressure.
Once the job analysis is done, the HR department needs to develop a competency scale for the key dimensions that have been identified as critical to performance. There is a wide competency net. In reviewing 34 studies that had been done to analyze the accuracy or validity of assessment centers, Arthur Winfred et al., writing in Personnel Psychology (Winfred, A. E.A. Day, T. L. McNelly & P.S. Edens. 2003. "A Meta-Analysis of the Criterion-Related Validity of Assessment Center Dimensions." Personnel Psychology. 56: 125 – 53.), found 168 dimensions that they boiled down to six broad categories: communication, consideration of others, drive (including work standards), influencing others organizing and planning and tolerance for stress. They found that the dimensions that best predict job performance are problem solving, influencing others and organizing and planning. In a regression analysis, they also found that communication skills were important.
Gibbons suggests that assessment centers use behaviorally anchored rating scales and checklists. These methods indicate specific behaviors associated with good performance rather than just abstract or empty valuation categories like excellent, good, average, etc. frequently used in performance appraisal.
It is necessary to decide which exercises to do. These might include role playing, a leaderless group exercise, a presentation and an in-basket exercise. Once the exercises and rating dimensions are designed, the raters must be trained, the exercises pilot tested and outcomes validated.
Future of Assessment Centers
The main issue for the future of assessment centers involves globalization. Organizations are increasingly using assessment centers; demand is growing around the world. Assessment centers offer an opportunity to multinationals to study how employees from different cultures interact. They can provide information about where cross-cultural issues might arise and help HR departments to develop training programs.
The stumbling block to wider adoption of assessment centers is the perceived cost. Consulting firms charge $1,000 to $2,000 per job applicant. But off-the-shelf exercises only cost $40. Moreover, it is easy to train in-house staff on how to design assessment centers. For a few thousand dollars, CPA firms can hire an academic expert to train in-house experts who can design assessments. After the training, the chief cost is the in-house time. Given the validated improvement in prediction of job applicants, it would seem that HR departments should consider applying assessment centers more broadly.
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Mitchell Langbert, PhD, is an associate professor at Brooklyn College. Widely published on the subject of human resource management, Langbert has consulted and served as an expert witness.