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CORPORATE L EADERSHIP COUNCIL M ARCH 2005

www.corporateleadershipcouncil.com

Fact Brief
Trends in Developmental Assessment Centers
Profiled Key Questions:
Industry Employees Revenues
Institution For what purposes do organizations
A* Pharmaceutical More than 100,000 More than $20 billion use assessment centers and what is
their typical audience?
B Pharmaceutical More than 50,000 More than $20 billion
C** High Technology More than 50,000 More than $20 billion How do organizations develop, manage,
and staff developmental assessment
D Manufacturing More than 10,000 Less than $5 billion
centers?
*Company A’s profile pertains only to its information management specialist assessment center.
**Company C is in the process of developing its assessment center What exercises and tests do
organizations include in their
assessment centers? What is the
return on investment for developmental
assessment center activities?

Issue Overview:
Table of Contents Using Developmental Assessment Centers to Fill the Leadership Pipeline
Executive Summary 2 The increasing need to fill the leadership pipeline . . .
Center Philosophy and
Audience 3 Talent management professionals are increasingly concerned about the aging workforce
and the recent rise in executive and senior management retirements. Research suggests
Center Development and that by 2005, the median age of the nation's workforce will be over 40 and that one in five
Management 5
senior executives in the Fortune 500 is eligible for retirement. A significant number of
Center Activities and North American firms need to fill 80 percent or more of their senior management positions.
Impact 7 Despite this need, only 18 percent of respondents to a Development Dimensions
International executive survey were highly satisfied with their internal succession
Research Methodology 11
management and development processes, and 33 percent expressed doubt in those
processes.1,2

According to the Council’s Voice of the Leader, organizations must successfully develop
high potential (HIPO) candidates to assume future leadership positions in order to
maintain growth. Companies that report highly successful succession management
processes were significantly more likely to report that they outperformed their
competitors.3,4

. . . is met with developmental assessment centers for developing HIPO employees.

Assessment centers offer an effective leadership development strategy, and are among
the more respected methods for identifying the most qualified candidates. Tests show
that interviews are only 20 percent effective while assessment centers are 65 percent
effective at identifying candidates who succeed.5

Given the need to identify and develop successful candidates for future leadership
pos itions , and the effectiveness of developmental assessment centers pipelines, this brief
offers tactical strategies drawn from interviews with four companies and the philosophy,
design, management, and impact of their centers.6

Catalog No.: This project was researched and written to fulfill the specific research request of a single member of the Corporate Leadership Council
CLC12ZUZ1M and as a result may not satisfy the information needs of other members. In its short-answer research, the Corporate Leadership Council
refrains from endorsing or recommending a particular product, service or program in any respect. Sources are contacted at random within
the parameters set by the requesting member, and the resulting sample is rarely of statistically significant size. That said, it is the goal of
 2005 Corporate the Corporate Leadership Council to provide a balanced review of the study topic within the parameters of this project. The Corporate
Executive Board Leadership Council encourages members who have additional questions about this topic to assign short -answer research projects of their
own design.

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 2
MARCH 2005

EXECUTIVE S UMMARY

To effectively assess, develop, and select high potential (HIPO) talent at manager and executive levels, profiled companies
implement single or multi-day assessment centers. Most profiled companies use simulation exercises, and two profiled
companies invite recently retired or current executives to participate as assessors in the center to offer visual evidence of high
level support for the assessment centers.

I. C ENTER PHILOSOPHY II. C ENTER D EVELOPMENT III. C ENTER ACTIVITI ES


AND AUDIENCE AND MANAGEMENT AND IMPACT

Center Philosophy Center Development and Costs Center Structure and Activities

Determining Purpose—Profiled companies Collaborating with VendorsTo Determining Center Activities—The


design assessment centers for selection maximize resources and to avoid content of assessment center programming
and development, though the majority offer reinventing the wheel, companies may differs according to the organization’s center
assessment centers for developmental choose to involve vendors in the design of philosophy, number of competencies, and
purposes as described below: their developmental assessment center methods of testing. Companies may
and the creation of leadership include the following center activities:
Ÿ Selection and Promotion competencies. Three of four companies
To streamline succession and talent designed their centers with the contribution • Role Play/In-Basket Exercises
management processes by identifying, of vendors. • Critical Thinking Assessments
developing, and promoting HIPO • Leaderless Group discussions
participants Anticipating Center Costs —There is no • Motivational Fit
Ÿ DevelopmentTo nurture and average cost for assessment centers due • Personality Assessments
accelerate employee development to opportunities for customization. Profiled • Problem-Solving Activities
independent of the selection and companies’ costs per person range from • Structured Interviews
promotion process $2,000 to $9,000.
Center Tests
Selecting Participants—Assessment Center Management and Staff
centers may be developed and offered to
any employee level. Centers at profiled Including Tests in CenterCompanies
Companies employ both internal and use standardized intelligence and
companies are designed for the following external assessors in their assessment
employee levels: behavioral tests in conjunction with
centers as a means of invoking company assessment centers. Research data show
culture while maintaining internal human that the combination of tests and activities
Ÿ High Potential Upper Managers resourse capacities.
Ÿ Information Management Managers provides a markedly better means of
evaluating employees than either alone.
Ÿ Director Level and Above Staffing with Internal Assessors— Profiled companies use the following tests:
Companies may choose to use internal
Center Audience staff as center assessors to promote • Myers Briggs Type Indicator
company culture and reflect senior support.
• FIRO-B Assessment
However, internal staffing presents the
Selecting the Audience —The assessment • Hogan Personality Test
center philosophy determines its audience following challenges:
(the recipients of center assessment
Ÿ Lack of objectivity Assessment Feedback and Impact
results ). Centers focused on selection
provide results to managers and talent Ÿ Significant demand on human capital
management, while those centered on Calculating ROI Proves Difficult—
development tend toward greater Hiring External AssessorsIn addition to Profiled companies find it difficult to
confidentiality as described below: internal staff, companies may also employ calculate the return on investment of
external consultants and executives to centers over short center histories.
Maintaining ConfidentialityLiterature participate as assessors and trainers. However, two profiled companies use the
recommends maintaining confidentiality of External assessors present the following following measures of success:
assessment results to encourage greater challenges:
participant development. Despite this, • Pool size of qualified internal
profiled companies distribute results to the Ÿ No familiarity with company culture candidates
following individuals: Ÿ Reduce legitimacy and support for • Top leader awareness of internal talent
assessment process • Performance on future competency
• Participant assessments
• Senior Manager
• Talent Management Team

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 3
MARCH 2005
Philosophy and Development and Activities and
Audience Management Impact

Center Philosophy and Audience

Companies design assessment centers with distinct philosophies, resulting in


differing designs and audience. This section details the different philosophies that
form the foundation of assessment centers at profiled companies.

Distinct Center Purposes: Center Philosophy #1: Promotion and Selection


Develop or Select/Promote
Since first appearing in AT&T’s 1956 Management Progress Study, companies have
historically used assessment centers to screen candidates or target employees for
“Organizations that adopt the
vanilla approach of ‘employee promotion.7 Research indicates that perhaps the most important feature of the
development’ are often confused assessment center is that it relates to future performance, and not current
when faced with the full menu of performance. By observing how a participant handles the problems and challenges
[assessment center] application
of the target job or job level (as simulated in exercises), assessors may better
options—promotions, rewards,
performance, succession, understand how the employee would perform in the target position.8
selection, and career planning.”
Selection and Promotion at Company C—Company C intends to use its
—“Assessment Centers: Challenges
assessment center for the selection and promotion of high potential, upper-level
and Success Measurement Criteria,”
Mercer HR Consulting employees , as described below:
(21 September 2004)
Table 1: Developmental Assessment for Selection Philosophies
Co. Employee Level Description of Center Origin and Philosophy
HIPO Employees Company C will use the results of the assessment center for its
for Partner succession and talent management processes. The company
C Positions and seeks to strategically develop and manage talent rather than
Above filling talent needs in the moment.

Determining Center Participants at Company C—In order to select center


þ Recommended Reading
participants who will benefit most from their assessment center experience,
Pre-Hire and Developmental Company C assigns the following potential and readiness indicators during their
Assessment Tools at Fortune 500 initial people review process:
Companies

Corporate Leadership Council FIGURE 1: DETERMINING CENTER P ARTICIPANTS AT COMPANY C


(January 2003)
Company C intends to assign prospective participants a pair of the following potential and
Details: This study seeks to examine readiness indicators, listed in order of priority:
current trends and preferences
surrounding the selection and Potential Indicators: Readiness Level:
assessment of employees. § High Potential (H) § Two Moves Away
§ Partner (P) § One Move Away
Available:
§ Vice President (E) § Ready Now
http://www.corporateleadershipcouncil.
§ Senior Leadership (S)
com/ShortLink?nLinkId=1327211
Employees ranked “H Two Moves” are of highest priority for participation in the center, as the
center would provide the greatest developmental opportunities for this level of participant.

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 4
MARCH 2005
Philosophy and Development and Activities and
Audience Management Impact

Center Philosophy (Continued)

Center Philosophy #2: Assessment and Development

Separating Development from Increasingly, assessment centers are playing a leading role in accelerating
Selection and Promotion employee development. For example, in 2001, Bristol-Myers Squibb partnered with
Personnel Development International (PDI) to create the Accelerated Development
“Using feedback for developmental Program, in which the company selected 30 managers possessing senior-manager
purposes requires distinct tools and potential to complete the assessment center. These HIPO employees attended the
processes that are different from
center not as part of a screening process, but rather to identify needs for future
those companies use when the
feedback data are used for training and development.9
administrative decision-making.
The two should be kept separate.” Reflecting the trend toward developmental assessment center use,
—Sylvester Taylor, the majority of profiled companies —Company A, Company B, and Company D—
“A Question of Leadership,” do not attach their assessment center procedures to selection and promotion
Leadership in Action processes. The philosophies of the companies’ assessment centers for HIPO
(May/June 2003)
managers and above are detailed below:

Table 2: Developmental Assessment Philosophies


Participant
Co. Description of Center Origin and Philosophy
Level
Company A created its developmental assessment center in 1995
HIPO when corporate leaders indicated that information management
Information upper-level managers needed help to become general business
A Management
leaders beyond their current technological capabilities. It does not
Managers attach its development program to the promotion or selection process
and Above given sensitivity and vulnerability of assessment.
Company B began its developmental program in June 2002 in five
Global Talent business areas in order to provide intensive feedback to help push
B and Upper employees to the next level. The company uses the as sessment
Management center to expose “blind areas” (areas for development) through
participation and feedback.
Director In 2003, Company D began using internal assessments for directors
D Level and and above both as interventions and for assessment/development
Above purposes.

Center Audience and Confidentiality

The Value of Confidentiality for Supporting the trend toward employee development rather than selection, literature
Development indicates that confidentiality of assessment center feedback is essential for
participant development. Confidentiality creates conditions of psychological safety
for the feedback recipients necessary for their development.10
“Confidential feedback is a
necessary ingredient for
development. To take a hard look at Confidentiality a Priority at Company A—While research highlights the benefits of
themselves and commit to
maintaining feedback confidentiality, only Company A provides confidential results,
self-improvement, people need a
safe environment.” as noted below. The company encourages, but does not mandate, that employees
provide a summary of their assessment results to their manager. The following table
—Cynthia McCauley,
depicts the recipients of assessment center results at profiled companies:
VP for Research and Innovation,
Center for Creative Leadership,
“A Question of Leadership,” Table 3: The Audience of Assessment Results at Profiled Companies
Leadership in Action Recipient of Results A B C D
(May/June 2003) Participant ü ü ü ü
Senior Manager ü ü
Others Chosen by Participant ü ü
Talent Management Team ü ü ü

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TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 5
MARCH 2005
Philosophy and Development and Activities and
Audience Management Impact

Center Development and Costs

Companies may develop and design their customized assessment centers and
competencies with the help of consultants and vendors. Additionally, companies
may choose to staff the assessment center with internal assessors and external
assessors hired on contract. This section details the development strategies, costs,
and types of internal and external assessors that profiled companies use to develop
and manage their assessment centers.

Collaborate with Vendors in Design of Center and Competency Models

FIGURE 2: TIMELINE OF COMPANY A’S To maximize resources and avoid reinventing the wheel, companies may choose to
VENDOR RELATIONSHIP involve vendors in the design of their developmental assessment center and creation
of leadership competencies. For example, Bayer worked with the Center for
1995 Creative Leadership to create a three-part program that addresses 13 leadership
competencies , including coaching, adaptability, influencing without authority,
Commission
and decision-making.11
Vendor—
Company A
commissions The majority of companies used consultants to design their assessment center,
Manchester with the exception of Company D. Company D does not have an on-site
Incorporated and
senior Harvard assessment center and instead uses a vendor to conduct a battery of assessment
Business School tests.
faculty to create Create
the assessment Simulations—
Initial Consultant Contributions at Company A—In 1995, Company A’s steering
procedure. Manchester
contracted with committee of information management executives commissioned an outside vendor
Thomsen to create its assessment procedure. In 2002, Company A brought the operations
Group to write and management “in-house.” Company A’s assessment vendor relationship is
assessment
center docum ented on the timeline to the left.
simulations.
Conduct Design and Participant Center Costs
Centers—
Manchester used
Three of the four profiled companies commissioned external consultants to design
its own
subcontractors and staff developmental assessment centers , and incurred design costs between
as consultants, $150,000 and $500,000. The chart below documents the number of competencies
2002
coaches, and tested, vendor contribution to competency development, the initial design costs,
role players at Move and the continuing cost per participant of profiled company centers:
the center. Internally—
Manchester
contract ended
Table 4: Design and Management Costs of Assessment Centers
in 2002, and
Company A Number of Participants Per
2005 hires former Vendor- Sessions
Co. Leadership Design Cost per Participant
Manchester Developed? per Year
consultants to Competencies Session Cost**
manage the $8,000 to
center. A 16 No $500,000 12 8
$9,000
B 16 Yes $215,000 4 to 5 12 $4,250
C 15 No $150,000* Unknown Unknown $2,000*
12 – 20 Partnered Not a
D As needed 1 $3,000
(Varies by Position) with Vendor Formal Center
*Estimation
**Cost per participant indicates the cost of sponsoring one individual in the assessment center,
including costs for compensating external personnel, hotel stays, and processing fees.

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 6
MARCH 2005
Philosophy and Development and Activities and
Audience Management Impact

Center Management and Staff


Research reveals that companies employ a mix of both internal and external
assessors. Companies may choose to employ internal assessors in order to maintain
company culture, while also employing external assessors to reduce the strain on
internal human resource capacities. Given these advantages, companies balance the
following advantages and disadvantages of both internal and external assessors:

Challenge: Leverage Internal Assessor Staff


Managing Internal Assessors
The involvement of internal and senior staff provides invaluable expertise and
Organizations build internal assessors support for both the center and the participants. A 2004 Chief Executive survey
to institutionalize the process. finds that organizations reporting a high level of senior management involvement in
However, “assessor burn out” is a
common consequence of using the centers are more likely to report greater effectiveness of succession management
same tools over an extended period of processes and higher levels of confidence in the organization’s supply of
time. leadership.12 However, the use of internal staff as assessors can result in a
—Mercer Human Resources significant drain of human resources. The following diagram highlights the costs and
Consulting benefits of using staff in the internal assessor role:
(21 September 2004)
FIGURE 3: COSTS AND BENEFITS OF LEVERAGING INTERNAL ASSESSORS

Advantages Disadvantages
Solution: + Promotes senior management − May lack objectivity
Decentralizing the Center buy-in − Significant demand on human
+ Possess knowledge of company capital
Organizations reduce the drain on culture
manager resources with the following
decentralizing steps: + Leverage and recognize internal
talent
Ÿ Incorporate the assessment
center method into day to day Determining Assessor Source—To determine whether to employ internal
activities, rather than dedicating assessors, companies should balance the drain on internal resources available for
an entire day to a center use in the assessment center with the benefits of inculcating company culture and
Ÿ Allow the assessee to schedule
his/her own meetings with senior management buy-in. That said, two of four profiled companies use the
assessors (managers) over a following internal talent in their developmental assessment center:
period of several weeks
Ÿ Managers incorporate time for § Corporate Psychologist (Company D) § Leaders from the Executive Committee
the exercises into their usual § Company Program Manager (Company B)
activities (Company B) § Trained Organization Development Staff
(Company D)
—International Congress for
Assessment Methods Employ Expert External Assessor Staff
Roundtable Discussion
(May 2000) In addition to select internal staff, profiled companies also employ external
consultants and executives to participate as assessors and trainers in their
assessment process, as detailed below:
§ Consulting Psychologists (Company A, § Trainers and Executive Coaches
Company D) (Company A and Company B)
§ Retired Internal and External
Executives—(Company A)

Organizations confront the following benefits and costs when choosing to employ
external assessors:

FIGURE 4: COSTS AND BENEFITS OF EMPLOYING EXTERNAL ASSESSORS


Advantages Disadvantages
+ Trained and qualified external − Not familiar with company
experts culture
+ Reduces internal human capital − May reduce view of legitimacy
resource requirement and support for assessment
+ Accurate and unbiased view process

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 7
MARCH 2005

Philosophy and Development and Activities and Impact


Audience Management

Center Structure and Activities


The structure and components of company assessment centers vary depending
upon center philosophy. Most profiled companies use role plays during the center
and provide training sessions following the assessment experience. This section
details the structure, component activities, and tests within profiled company
assessment centers, as well as participant feedback and the ROI of profiled
company centers. Profiled center components are provided in the chart below:

Benefits of Developmental Table 5: Assessment Center Component Details


Assessment Centers Purpose of Center Number of Number of Number of Exercises
Co.
Center Length Participants Assessors Competencies and Tests
While assessment centers are unable Ÿ Role Play
to effectively evaluate the A Develop 1 Day 8 6 16 Ÿ MBTI
competencies of work standards and Ÿ Hogan
motivation, centers exhibit the Ÿ Role Play
following benefits: Ÿ Group
B Develop 3 Days 12 9 16 Exercise
ü Provide insights beyond those Ÿ Interview
that can be gained by quicker, Ÿ Training
easier methods such as paper- C Select 3 Days Unknown Unknown 15 Unknown
and-pencil tests and interviews
ü The use of outside professional Ÿ MBTI
assessors provides an accurate D Develop
3 hrs –
1 1 12 – 20 Ÿ FIRO-B
and unbiased view of 2 Days Ÿ 360-
competencies Degree
ü Participants perceive the
assessment center as being fair,
job relevant, and accurate
ü Assessment centers allow for an Include Multiple Assessment Center Components
accurate comparison of people
throughout the world based on The content of assessment center programming differs according to the center’s
the same dimensions philosophy, number of competencies tested, and methods of testing. As tools for
—Training & Development development, assessment center exercises measure desirable traits or skill gaps,
(May 2000) without regard for actual job title or responsibility. Companies may employ the
following assessment and development tools during assessment:13

§ Critical Thinking Assessments § Problem -Solving Activities


§ Leaderless Group Discussions § Role Plays/In-Basket Exercises
§ Motivational Fit Exercises § Structured Interviews
§ Personality Assessments

Assessment Center Case Example

A telecommunications firm with more than 100,000 employees profiled in past


Council research uses the following role play exercise developed in conjunction with
Development Dimensions International:

FIGURE 5: ROLE PLAY EXERCISE AT L ARGE TELECOMMUNICATIONS COMPANY

1. Role Play 2. Board Presentation 3. Accompanying Tests

Ÿ Individual takes on the Ÿ Individual presents Ÿ Highland’s Abilities Battery


role of a CEO for three business plans to a Ÿ Complexity of Information
hypothetical years fictitious board Processing
Ÿ Examine business plans (assessors) Ÿ Hogan’s Personality
Ÿ Make recommendations Inventory
Ÿ Specialized 360-degree tool
 2005 Corporate Executive Board
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 8
MARCH 2005

Philosophy and Development and Activities and Impact


Audience Management

Center Structure and Activities (Continued)

Three of the four profiled companies offer, or will offer, in-house developmental
assessment centers. Company A, Company B, and Company C do not vary the
structure of the center by position, as each individual is responsible for the same
competencies. The following diagrams outline the length, structure, and exercise
content of the assessment centers at Company A and B:

Company A’s Assessment Center—Company A includes its one-day assessment


þ RECOMMENDED READING
center in a multi-day overall development program. The center assesses the
Grow Your Own Leaders: participant’s grasp of Company A’s 16 competencies with six role play exercises and
How to Identify, Develop, and Retain a six person panel of retired senior executives, as described below:
Leadership Talent

William Byham Elements Timing


Financial Times/Prentice Hall Six role play exercises—Total simulation approach to First
2002 assessment that integrates exercises into scenarios Day

Details: Covers every phase of Report—The executive coaches create a ten page report for That
executive development and succession, each participant over night. Night
introducing high-impact, no-bureaucracy
at work. Follow-Up Training—Participants have the opportunity to
Follow
attend a five-day follow up development session at the Harvard
Available: www.amazon.com Up
Business School

Company B’s Assessment Center—Company B conducts a 2.5 day assessment


centered on a common role play scenario, including a business case, group
exercise, and an individual interview separate from the role play scenario. The
company assesses 16 leadership competencies as participants experience the
following center elements:

Elements Timing
Dinner and Preparation—Participants dine together and spend
two hours reviewing preparatory material on an overarching Evening
scenario of a fictive corporation

Role Play/Business Case—Individuals participate in a role play


for the first and second activity in which the consultant plays a
partner First
Group Exercise—Individuals participate in a team discussion Day
with a problem to solve that results in a presentation the second
day
Group Presentation—The participant group presents its
business case with regard to the business problem exercise on
the first day Second
Individual Interview—Each individual participates in an Day
interview independent of all other exercises conducted by
company senior management
Communications Training—If the participant desires, she or Morning
he may meet with the training consultant to review a video tape of the
of the participant’s center activity. The consultant offers training Third
and tactics for improved communication and body language Day

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 9
MARCH 2005
Philosophy and Development and Activities and Impact
Audience Management
Center Tests

Companies use standardized intelligence and behavioral tests in conjunction with


Ability Testing Prevalence
assessment centers. The most common standardized employment tests assess
About 50 percent of companies use intelligence and may include segments evaluating candidates' reasoning, memory,
standardized employment tests, and
comprehension, and numerical abilities. Research data show that the combination
roughly 70 percent engage in some
sort of ability testing. of intelligence data and behavioral observations provides a markedly better means
of evaluating employees than either used alone.14,15
—Corporate Counsel
(September 2003)
Balance Center with Behavioral and Cognitive Tests

To determine accurately the competencies of assessment center participants,


Company A and Company B use the following behavioral and cognitive tests:

Center Test Vending Information


§ Meyers Briggs Type Indicator—Measures a person’s preferences, using four
FIRO- B Assessment basic scales with opposite poles : extraversion/introversion, sens ing/intuitive,
http://www.careers -by -design.com/firob.asp thinking/feeling, and judging/perceiving (Company A and Company D)
Myers Briggs Type Indicator § FIRO-B Assessment—Reveals the leadership and management style of
http://www.careers -by -design.com/mbti.asp participants through assessment. (Company D)
Hogan Personality Test § Hogan Personality Tests—Illustrates a participant's natural advantages and
http://www.hoganassessments.com/HPI.aspx their potential challenges in a job or business setting (Company A)

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 10
MARCH 2005
Philosophy and Development and Activities and Impact
Audience Management

Assessment Feedback and Impact

According to William Byham’s “Assessment Center Method, Applications, and


Measuring ROI at Bell
Technologies,” Bell gained $13.4 million over a four-year period in job performance
Researchers at Bell calculated the improvement of the 1,100 new managers that completed its developmental
“bottom-line” impact of promotion assessment center.
decisions based on assessment center
information versus decisions based on
criteria extracted from other methods Unlike Bell, profiled companies find it difficult to quantify the impact of assessment
using the following methodology: centers and the assessment process on the leadership development and succession
management process. The following information reflects the qualitative participant
1. Gathered performance
information provided by more and company feedback regarding their assessment center experiences, as well as
than 700 line managers over four- limited data on the quantitative return on investment.
year period
2. Combined data on validity and
Soliciting Feedback
cos t of the assessment center
with the dollar-valued job
performance of first- level The three profiled companies with assessment center operations report both positive
managers and negative feedback from the assessment center process. Company A and
3. Produced an estimate of the
organization’s net gain in dollars Company B received significant support from senior executives and participants, as
resulting from the use of described below:
assessment center information in
the promotion process.
Company A
—“Assessment Center Method,
Applications, and Technologies” “One of the finest programs of its kind at Company A.”
(May 2000)
“Considered very, very fair, memorable, and highly instructive by participants.”

“Tremendous high-level support.”

Company B

“Videotaping participants for training purposes has been the best thing we have done.”

Company D
Challenge and Solution:
“Some participants knew they were successful in their careers, but the cognitive tests
Negative Center Feedback
showed they were below average in some components. The negative reaction by the
participants slowed down the assessment center development process.”
Challenge —While only using
developmental assessments for one
and a half years, Company D received Calculating Return on Investment
negative feedback from its first round
of assessment tests. As the interviewee at Company B noted, determining quantitative return on
Solution—The interviewee at investment for assessment centers is difficult, especially in the initial years when
Company D suggests that the performance tracking is incomplete and inadequate. However, both Company A and
company might have avoided negative Company C established distinct means of calculating ROI, as demonstrated in the
feedback by providing broader
education on the purpose and table below:
implications of assessment center
results . Table 6: Center ROI at Profiled Companies
Company Impact of Assessment Center
§ Pool of future vice presidents and CIOs has grown from 1 or 2
prospects a year, to at least 30.
A
§ Within 12 months, top leaders gained a much better understanding
of the talent within their organization.
B No data yet available

C § Intends to assess competencies every year to determine the impact


of the center on participants.
D No data yet available

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 11
MARCH 2005

T HE R ESEARCH PROCESS IN BRIEF

Research The Corporate Leadership Council conducted a comprehensive search of published


Methodology materials regarding the subject of developmental assessment centers , drawn from
previous Corporate Executive Board research, trade press journals, other research
organizations, and the Internet. Council staff then interviewed four human resources
professionals at different organizations. These individuals discussed their
developmental assessment center program . This report represents the findings from
secondary and primary sources.

Project Aims 1. What is the philosophy behind the use of assessment centers organizations?
Are they used primarily for developmental or evaluative purposes? Pre-hire
assessment?
2. What is the target audience of assessment centers? What are the target
positions?
3. Do organizations purchase an off-the-shelf product from a vendor, work with a
vendor to develop a customized solution, or develop the center solely in-house?
4. What is the approximate cost of using a vendor?
5. Do organizations manage the assessment center using vendor personnel or with
internal resources?
6. If organizations use vendor personnel, what is the approximate cost per person to
maintain the center?
7. What type of personnel do organizations use to staff internal assessors?
8. What is the length of assessment centers? Does the length of assessment
centers vary by the position of the individual being assessed?
9. How many exercises do organizations include in the assessment center?
Does this number vary by position?
10. What types of tests do organizations use?
11. Do organizations use internally developed competency models or work with
vendors to develop the competencies being assessed?
12. Do organizations realize a significant return on investment from the use of
developmental assessment centers?

Guide to Tables and Figures Table 1: Developmental Assessment for Selection Philosophy Page 3
Table 2: Developmental Assessment Philosophies Page 4
Table 3: The Audience of Assessment Results at Profiled Companies Page 4
Table 4: Design and Management Costs of Assessment Centers Page 6
Table 5: Assessment Center Component Details Page 7
Table 6: Center ROI at Profiled Companies Page 10

Figure 1: Determining Center Participants at Company C Page 3


Figure 2: Timeline of Company A’s Vendor Relationship Page 5
Figure 3: Costs and Benefits of Leveraging Internal Assessors Page 6
Figure 4: Costs and Benefits of Employing External Assessors Page 6
Figure 5: Role Play Exercise at Large Telecommunications Company Page 8

 2005 Corporate Executive Board


TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 12
MARCH 2005

Professional Services
The Corporate Leadership Council has worked to ensure the accuracy of the information it provides
to its members. This project relies upon data obtained from many sources, however, and the Council
cannot guarantee the accuracy of the information or its analysis in all cases. Further, the Council is
not engaged in rendering legal, accounting or other professional services. Its projects should not be
construed as professional advice on any particular set of facts or circumstances. Members requiring
such services are advised to consult an appropriate professional. Neither Corporate Executive Board
nor its programs is responsible for any claims or losses that may arise from any errors or omissions in
their reports, whether caused by Corporate Executive Board or its sources.

1
Joel Schettler, "Building Bench Strength," Training (June 2002). (Obtained from Lexis-Nexis).
2
Author Unknown, "Succession Management: Filling the Leadership Pipeline," Chief Executive (April 2004).
(Obtained from Factiva).
3
Corporate Leadership Council, Voice of the Leader, Washington: Corporate Executive Board (2001).
4
Author Unknown, "Succession Management: Filling the Leadership Pipeline."
5
Sarah Butcher, "How to Gain an Edge at Assessment Centers," eFinancialNews (16 April 2003).
(Obtained from Lexis-Nexis).
6
William Byham, "Leadership: How to Create a Reservoir of Ready-Made Leaders,"
Training & Development (March 2000). (Obtained from Lexis-Nexis).
7
Joel Schettler, "Building Bench Strength."
8
William Byham, "The Assessment Center Method, Applications, and Technologies,"
Development Dimensions International (May 2000). (Obtained through www.assessmentcenters.org).
[Accessed 27 February 2005].
9
Joel Schettler, "Building Bench Strength."
10
Sylvester Taylor, "A Question of Leadership," Leadership in Action (May/June 2003). (Obtained through EBSCO).
11
Heather Johnson, "Leveraging Leadership," Training (January 2004). (Obtained through ProQuest).
12
Author Unknown, "Succession Management: Filling the Leadership Pipeline."
13
Joel Schettler, "Building Bench Strength."
14
Frank J. Landy, Ph.D., "The Best Assessments; Standardized Testing Can Reveal the Right Candidate for the Job—
But Handle with Care," Corporate Counsel (1 September 2003). (Obtained from Factiva).
15
William Byham, "Assessment Center Methods."

 2005 Corporate Executive Board