At The Oliver Group we have a unique window into the workings of the “organizational mind” as expressed through the thinking and decisions made by people involved with the Predictive Index®.  We’ve observed many reasons to use the PI over the years, but the most common reason people approach us for the PI is for employee selection and hiring purposes.  They’re trying to remedy bad hiring choices and employee turnover which are frequently but erroneously seen as stemming from a common cause.  Some clients have issues regarding teams, performance management, and conflict, but historically more of these usages have been “discovered” in the process of employing selection/hiring processes around PI. 

If you believe that Predictive Index is only a tool for Human Resources, the organization’s success and performance with the tool will be limited.  I would like to explore that a little with you, and also look at some findings from the recent Aberdeen Report, which explores the benefits of using assessment tools throughout the employee lifecycle, beyond employee selection uses and beyond simply the Human Resources department.

Locking PI within human resources inhibits its efficacy – human capital is more than hiring

It is frustrating when Predictive Index is limited to use by “HR Experts” who want to coach operating managers on the specifics of the PI. Whether this originates from the CEO or the HR executive it represents both a failure to create a clear view of the human capital cycle and to conceptualize the human capital cycle as anything but a hiring phenomenon.  The PI is a vehicle to help manage the decisions within the human capital cycle to more effective outcomes, so it can both assist in minimizing talent risk and the maximization of talent performance.  However, this cannot occur when PI® is filtered through others (i.e. the HR department only), but through first-person involvement and transfer of knowledge.  This creates the ability to reformulate thinking patterns of the managers and leaders who are charged with making better decisions. It is not the case that HR is not an entirely appropriate venue for the PI; it simply does not have the impact it could otherwise have if that is where it is localized.

Assessments are important throughout the employee lifecycle

The Aberdeen Group, a global business research firm, recently published a study on the efficacy of assessments in the management of human capital and found Best-in-Class  organizations have a fundamentally different organizational mind-set about the use of assessments across the range of the employment relationship from those rated “Average” or even “Lagging.”  For instance, characteristics that are common to “Best-in-Class” performers include:

• The use of assessments to inform and drive better talent decisions at multiple points in the employee lifecycle from hiring to succession
• Active collaboration and knowledge transfer between HR and operating units to create a language of competencies and motivational needs to assess against
• The use of multiple assessment vehicles and types appropriate to the decision point to assist in minimizing risk in critical talent decisions
• The use of assessment/statistical data to help identify talent gaps and available talent resources to support long-term workforce development and business planning
• Assessment not only for current competencies but for future leadership and development needs and potential.

Using assessment beyond hiring and selection is vital

The need to balance efficiency in the light of economic uncertainty while supporting organizational growth is the key driver behind all human capital management efforts. Broader use of assessment technology and leadership training in the use and thinking around assessments is highly correlated to overall success and impact of Human Capital Management efforts.   The biggest differentiation is in the post-hire utilization where Best-in-Class companies are found to be 69% more likely to have assessments in use to guide managerial decision making regarding development, coaching, engagement, individual and team conflict and similar post-hire phenomenon. If the thinking focus of Predictive Index is limited to hiring/selection these other points will not even be recognized as having an impact that could be improved over time.

Organizational fit is the top piece of hiring quality—and fit involves the team

Organizational “fit” was the number one element of quality of hire and for Best-in-Class companies, and knowing how an individual will fit with an existing team was even more important that assessment for skills and other competencies when evaluating overall organizational fit. “Fit” encompasses more than the behavioral/motivational/cognitive dimensions; however, if we could identify the characteristics of the existing team to determine what’s working well we could certainly eliminate many “obvious” poor choices.  Thus, we could more effectively manage less than perfect humans in less than perfect situations where life has thrown them to create better results for all parties involved. We call this “raising the batting average” which is my number one goal with a client.

Objective insights are more valuable than hiring manager intuition

An interesting finding that Aberdeen reported was that Best-in-Class organizations demonstrate a mind-set that gives more credence to the output of assessment tools and their utilization than to the managers’ “instinct” of things. While no one seriously suggests that our instincts should be discounted, we need to balance subjective and objective thoughts and teach managers and leaders that instincts generally have a low level of reliability in life. I’ve come to call this phenomenon “the world is still flat” scenario as people hold to ideas, feelings and ways of acting that become “natural” but don’t produce consistent results over time no matter what facts are offered to them. Best-in-Class companies are 11% less likely to use hiring manager recommendations (instincts) alone and 26% more likely to use multi-dimensional assessments than all others.

Benefits of using assessments beyond hiring

Obviously pre and post-hire decisions are not made in a vacuum and who is hired is dependent on the talent already existing within an organization, plus development priorities may be influenced by external talent insights and conditions. The employee life-cycle is interconnected across the spectrum, and best in class organizations demonstrate more insightful thinking about the use of information gathered about an individual through pre-hire assessment in the post-hire stages of the relationship. The most common uses cited are:

• Education of the hiring manager on behavior, motivational structure, work style and preferences of the new hire in relation to the job they are in – 56%
• Utilizing pre-hire assessment data to identify high-potential future talent – 51%
• The development of targeted learning and development plans for current and future utilization of talent – 49%

The utilization of pre-hire assessments has also been demonstrated to significantly improve performance on key metrics but employing them in the post-hire boosts performance in Best-in-Class companies even further;

• Individual performance goals and MBO’s achieved quicker – 57%
• New hires achieving first performance milestone quicker – 46%
• Improving talent in bench strength – 36%

Assessment enables knowledge transfer & understanding throughout the employee lifecycle

Managing and transferring knowledge to managers and leaders is really about understanding the use of metrics.  Best-in-Class organizations excel when it comes to assessments because they uncover data about individuals and teams usable for people who make decisions based on the data. Hiring and operating managers are almost 40% more likely to know the specifics of the assessments used and how to integrate them into conceptual plans and thinking as part of the hiring and employee cycle. Employees in these organizations are 33% more likely to understand how assessments are used; assessment data is more likely to be accessible for appropriate parties for individual and group discussion.

To get PI beyond HR, ensure everyone knows the goals of assessment uses during life cycle

Best-in-Class companies are doing a better job of ensuring that everyone involved knows how and why assessments are being utilized and are using that data as a primary piece in making decisions Three areas where these companies excel in using assessment data at more points in the talent lifecycle are: on-boarding, strategic and business planning and workforce planning and development.

• On-boarding is a critical point in the employee/employer relationship. When someone is going through the hiring and interview process the organization gathers a lot of information/data about the candidate including things that could derail them. By translating this knowledge into intelligible information for key stakeholders and team-members, Best-in-Class companies recognize how powerful and effective it is to share any data about individuals and teams that facilitate them coming to the table together to accomplish organizational goals.
• Best-in-Class companies are also twice as likely to employ assessment data as part of a strategic business planning process.
• Best-in-Class companies are 75% more likely to do so for workforce planning and development.

If you don’t want to move beyond selection and HR for the Predictive Index

We have long-standing relationships with organizations that use PI as simply a vehicle to hire and select.  HR is almost always best suited to be the “chief steward” of the PI so involvement in training for the HR professional group is distinctly beneficial in itself. But HR alone does not leverage the capabilities potential that are present at the operating level of PI implementation as Best-in-Class organizations clearly demonstrate.

If HR selects and hires “correctly” to benchmark/PRO specifications and turns the employee over to a manager who does not understand the responsibility to “lead by needs,” and performance or retention suffers we do not have an HR problem with bad hires but a leadership failure for not meeting needs. We cannot affect both sides of the coin by focusing and operating on only one side of the coin.

Source:  Assessments 2011:  Selecting and Developing for the Future.  Aberdeen Group.  

Article by Michael Wohl.