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Empirical HRM at IBM
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Empirical HRM at IBM

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This research illustrates the power of empirical approaches to talent management. First study shows the statisticl linkage of competency proficiency to the performance of IBM's top 300 excecutives. …

This research illustrates the power of empirical approaches to talent management. First study shows the statisticl linkage of competency proficiency to the performance of IBM's top 300 excecutives. Second study demonstrates the power of assessment, and how it paid off in revenue terms when applied to the selection of large account managers. Presentation was made on the maiden broadcast of the Conference Board's Human Capital Watch in October 2011.

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  • 1. www.conferenceboard.org© 2011 The Conference Board, Inc. |1 Human Capital Watch October 2011
  • 2. www.conferenceboard.org© 2011 The Conference Board, Inc. |31 Michael N. Bazigos, Ph.D. Strategy and Change Executive IBM Holds global responsibility for internal and external initiatives related to workforce and leader effectiveness in an enterprise with over 400,000 employees doing business in 170 countries, including 45,000 leaders Current focus areas include assessment of key leader populations, competency and development strategy, with special focus on the performance of sales executives globally and in “growth countries” Currently an adjunct professor at Columbia University’s Department of Organization and Leadership
  • 3. www.conferenceboard.org© 2011 The Conference Board, Inc. |32 The IBM Leadership Framework Linkage Research in Talent - Bazigos © 2011 IBM Corporation
  • 4. www.conferenceboard.org© 2011 The Conference Board, Inc. |33 Competencies Explain Most of What Matters to Performance Linkage Research in Talent - Bazigos © 2011 IBM Corporation Relative contributions of competencies to performance Factors Influencing Performance Ratings Breakdown of the 56% Competency Portion All underlying correlations statistically significant. Odds of a chance finding are less than 1 in 100. Data sources: I&VT 360-degree competency ratings (“Total Others”) and BTLR performance ratings.
  • 5. www.conferenceboard.org© 2011 The Conference Board, Inc. |34 Does a 56% linkage matter? Depends; compared to what? Linkage Research in Talent - Bazigos © 2011 IBM Corporation LINKAGE r % variance explained Smoking and lung cancer after 25 years* .08 < 1% Antihistamines and reduced nasal discharge* .11 1% Ibuprofen and pain reduction* .14 2% Height and weight of US adults* .44 19% SAT (verbal) and freshman GPA** .47 22% SAT (math) and freshman GPA** .48 23% IBM Competencies and executive performance .75 56% * Hogan, R.T. (2011). Issues, controversies, and advancements in workplace assessment . Panel discussion at the 2011 Conference of I/O Psychologists, Session #193. ** http://fairtest.org/sat-i-faulty-instrument-predicting-college-success
  • 6. www.conferenceboard.org© 2011 The Conference Board, Inc. |35 The performance of MDs who are recommended by assessment far exceeds the performance of those who are not recommended. Linkage Research in Talent - Bazigos © 2011 IBM Corporation History suggests an multi-billion dollar 3-year gain for MDs using a new, robust assessment (Based on revenue CAGR gain for “Recommended” segment of incumbents against the other two groups)
  • 7. www.conferenceboard.org© 2011 The Conference Board, Inc. |36 Our stress test retro-”selected” top 39%. Resulting success rate of 82% is in line with (and exceeds) industry benchmarks when discriminating at the 40% level. Linkage Research in Talent - Bazigos 82% IBMBenchmark Source: “Business value of employee selection”, Wayne Cascio, 11/2009, NYC to METRO Applied Psychology Association © 2011 IBM Corporation
  • 8. www.conferenceboard.org© 2011 The Conference Board, Inc. |37 This result compares favorably with external estimates of selection success rates for executives Linkage Research in Talent - Bazigos © 2011 IBM Corporation 33% 50% 60% 70% 82% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Peter Drucker estimate (1985)* Hogan, Hogan & Kaiser (2010)* BEI assessment method (Consultant) Jack & Suzy Welch (2007)* New IBM MD assessment (2009) •Source: Hollenbeck, G. (2009). Executive selection: What’s right… and what’s wrong. Industrial and Organizational Psychology, 2, 130– 143. Retrieved from http://www.turknett.com/sectionS/documents/ExecutiveSelection_001.pdf
  • 9. www.conferenceboard.org© 2011 The Conference Board, Inc. |38 IBM’s Workers Beyond Borders report and Getting Smarter About Your Workforce report can be downloaded at: The Conference Board www.conference-board.org
  • 10. www.conferenceboard.org© 2011 The Conference Board, Inc. |39 Human Capital Watch for October 2011 The Human Capital Practice @ The Conference Board This Month’s Human Capital Watch Focus: Human Capital Analytics History of Human Capital Analytics Analytics, Measurement & Evaluation Approaches to Human Capital Analytics Human Capital Analytics Roundtable Next Month’s Human Capital Watch
  • 11. www.conferenceboard.org© 2011 The Conference Board, Inc. |40 Featuring Rebecca Ray, Ph.D. (The Conference Board) Michael Bazigos, Ph.D. (IBM) Jac Fitz-enz, Ph.D. (Human Capital Source) Julia Gomez (JetBlue Airways) Patti Phllips, Ph.D. (The Conference Board, The ROI Institute) Roundtable Discussion

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