Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
The Predictors of Performance                            August 3, 2011                                ERE.netPaul Basile,...
Introductions         POLL: who are we?  •    In-house talent acquisition specialist  •    Talent management specialist  •...
Our agenda•    Why performance prediction matters•    What predicts performance•    How to measure those predictors•    Re...
Every hire is a prediction                             4	  
The impact of predicting performance in hiring        Performance predictive                                              ...
Predicting performance – the gain•  ≈2/3 of the market value of the S&P 500 is driven by   intangible assets, primarily pe...
Predicting performance – the gain       Bottom 15% of                                  Top 15%        performers          ...
Predicting performance – avoiding pain       •  85% of applicants are unfit for the job       •  55% of employees are diss...
What predicts performance?                             9	  
The researchCorrelation coefficient              0.7         Cognitive ability tests with behavioral                      ...
Baselines and differentiatorsBaselines                        Differentiators•  Skills                        •  Cognitive...
Baselines•  Knowledge       –  eg. Law degree, plumbing course, programming languages       –  Learnable       –  Often co...
Differentiators•  Cognitive ability                           Competencies•  Behaviors       –  Apply to all roles, in dif...
Fit for purpose•  Similar roles make similar demands…•  …but every organization is different      –  Different competencie...
Example: Project Oxygen                          15	  
Example: Project Oxygen               Technical ability the                 least important                 success factor...
Measuring performance predictors•    Gather data       –    Predictors of superior performance in the specific job       –...
Gathering data•  Consistently•  Objectively•  Fit for purpose•  Timely•  Cost-effectively                                 ...
Gathering data: the job      •  Need to assess baseline and         differentiating requirements and         job context  ...
Gathering data: the job                          20	  
Gathering data: candidate skills & knowledge                 •  Thousands of different skills                 •  Accurate,...
Gathering data: candidate skills & knowledge                                        22	  
Gathering data – candidate competencies Psychologist  interview                                    23	  
Gathering data – candidate competencies Psychologist  interview      Observation at          work                         ...
Gathering data – candidate competencies Psychologist  interview                           Psychometric tests      Observat...
Gathering data – candidate competencies                                    26	  
Gathering data: candidate preferences                 •    Good tools exist, but..                 •    Too few are specif...
Gathering data: candidate preferences                                   28	  
Gathering data: timingApplication      Interviews /          Psychometricforms /          other                 assessment...
Gathering data: timingApplication        Interviews /           Psychometricforms /            other                  asse...
CompareJob      Candidates                   31	  
CompareJob      Candidates                   Rank shortlist                                    32	  
CompareJob                                 Hire      Candidates                   Rank shortlist                          ...
Effective comparison•    Demonstrates objectivity and consistency•    Is validated against performance•    Scalable and co...
Example: effective comparison                                35	  
Hire and placePerformance predictors:•  Guide final selection      –  Focus structured interviews      –  Define additiona...
ResultsCompanies that use scientific performance prediction,compared to those who don’t, have:             •  75% greater ...
Thank you       Paul Basilepaul.basile@matchpointcareers.com                                    38	  
Upcoming SlideShare
Loading in …5
×

The Predictors of Performance

2,988 views

Published on

ERE Webinar from 8/3/11, presented by Paul Basile.

Published in: Business, Technology

The Predictors of Performance

  1. 1. The Predictors of Performance August 3, 2011 ERE.netPaul Basile, CEO Matchpoint Careers, Incpaul.basile@matchpointcareers.com
  2. 2. Introductions POLL: who are we? •  In-house talent acquisition specialist •  Talent management specialist •  HR generalist •  Professional recruiter •  None of the above 2  
  3. 3. Our agenda•  Why performance prediction matters•  What predicts performance•  How to measure those predictors•  Results 3  
  4. 4. Every hire is a prediction 4  
  5. 5. The impact of predicting performance in hiring Performance predictive True selection criterion False positives positives True False negatives negatives Job performance 5  
  6. 6. Predicting performance – the gain•  ≈2/3 of the market value of the S&P 500 is driven by intangible assets, primarily people•  Top performing employees are: –  40% more productive in operational roles –  46% more productive in management –  67% more productive in sales “People are not your most important asset. The right people are.” – Jim Collins, Good to Great 6  
  7. 7. Predicting performance – the gain Bottom 15% of Top 15% performers of performers Minus 40% Plus 40% $48,000 $80,000 $112,000“With recruiting costs, salary, benefits, bonus, and training costs,along with overhead, regular pay increases, and normal tenureexpectations, it’s not hard to view any six-figure hire as a million-dollar investment.” – David Jones, Million Dollar Hire 7  
  8. 8. Predicting performance – avoiding pain •  85% of applicants are unfit for the job •  55% of employees are dissatisfied with their job •  46% of new hires leave within 18 months•  30% of business failures are due to poor hiring decisions 8  
  9. 9. What predicts performance? 9  
  10. 10. The researchCorrelation coefficient 0.7 Cognitive ability tests with behavioral assessment (0.67) 0.6 Cognitive ability tests (0.51)Powerfully 0.5 Structured interviews (0.51)predictive Knowledge of the job (0.48) 0.4 Personality tests (0.40)Somewhat References (0.36) 0.3predictive 0.2 Unstructured interviews (0.18) Years of job experience (0.18) Weakly 0.1predictive Years of education (0.10) 0 Graphology (0.02) Adapted from I. Robinson and M. Smith, Personnel Selection (2001) British -0.1 Age (-0.1) Psychological Society 10  
  11. 11. Baselines and differentiatorsBaselines Differentiators•  Skills •  Cognitive ability•  Knowledge •  Behavior •  Preferences Employee performance 11  
  12. 12. Baselines•  Knowledge –  eg. Law degree, plumbing course, programming languages –  Learnable –  Often come from formal education•  Skills –  Technical abilities –  Learnable –  Often come from experienceHigher knowledge and/or skills do not equate to higher quality hire 12  
  13. 13. Differentiators•  Cognitive ability Competencies•  Behaviors –  Apply to all roles, in different combinations –  Relatively stable over time for an individual –  Strongest reliable predictors of human performance•  Preferences –  Different for each individual, and can change over time –  Account for around 26% of engagement, 12% of performance and 26% of managerial potentialAre higher competency and preference levels linked to superior work performance? Yes, but… 13  
  14. 14. Fit for purpose•  Similar roles make similar demands…•  …but every organization is different –  Different competencies and preferences –  Different levels of individual competencies and preferences•  Need for tailoring by role and by organizational context Fit, not absolute score, predicts performance 14  
  15. 15. Example: Project Oxygen 15  
  16. 16. Example: Project Oxygen Technical ability the least important success factor 16  
  17. 17. Measuring performance predictors•  Gather data –  Predictors of superior performance in the specific job –  Candidate profiles•  Compare job and person•  Hire and place 17  
  18. 18. Gathering data•  Consistently•  Objectively•  Fit for purpose•  Timely•  Cost-effectively 18  
  19. 19. Gathering data: the job •  Need to assess baseline and differentiating requirements and job context •  Groundwork done by consultants & psychologists •  Established, validated methodologies & normed reference databases •  Used to be expensive & time consuming… 19  
  20. 20. Gathering data: the job 20  
  21. 21. Gathering data: candidate skills & knowledge •  Thousands of different skills •  Accurate, skill-specific assessments exist (many online) •  Skill testing usually quick and reliable •  Usually assessed at relatively early stage 21  
  22. 22. Gathering data: candidate skills & knowledge 22  
  23. 23. Gathering data – candidate competencies Psychologist interview 23  
  24. 24. Gathering data – candidate competencies Psychologist interview Observation at work 24  
  25. 25. Gathering data – candidate competencies Psychologist interview Psychometric tests Observation at work 25  
  26. 26. Gathering data – candidate competencies 26  
  27. 27. Gathering data: candidate preferences •  Good tools exist, but.. •  Too few are specific to work •  Too few tools are online •  Often undervalued and underused despite dramatic impact of employee engagement on results 27  
  28. 28. Gathering data: candidate preferences 28  
  29. 29. Gathering data: timingApplication Interviews / Psychometricforms / other assessmentsrésumés assessments Traditio nal rec ruitmen t pipeli ne 29  
  30. 30. Gathering data: timingApplication Interviews / Psychometricforms / other assessmentsrésumés assessments Traditio nal rec ruitmen t pipeli ne ine itme nt pipel ting recru anc e-predic PerformPsychometric Self-selection, Interviews /assessments employer- other specific assessments assessments 30  
  31. 31. CompareJob Candidates 31  
  32. 32. CompareJob Candidates Rank shortlist 32  
  33. 33. CompareJob Hire Candidates Rank shortlist 33  
  34. 34. Effective comparison•  Demonstrates objectivity and consistency•  Is validated against performance•  Scalable and cost-effective•  Easy for recruiter•  Delivers results quickly•  Gives practical inputs to final selection 34  
  35. 35. Example: effective comparison 35  
  36. 36. Hire and placePerformance predictors:•  Guide final selection –  Focus structured interviews –  Define additional assessment requirements•  Inform talent management & career planning –  Baseline for development –  Can be matched to job families & career paths –  Can be used to assess talent bench strength 36  
  37. 37. ResultsCompanies that use scientific performance prediction,compared to those who don’t, have: •  75% greater year-on-year increase in hiring manager satisfaction •  75% greater yr-on-yr reduction in hiring costs •  2.5 x greater year-on-year increase in profit per employee 37  
  38. 38. Thank you Paul Basilepaul.basile@matchpointcareers.com 38  

×