December 2008 | Issue 12
The Science Behind Talent Measurement
By Ken Lahti, Ph.D.
Effective talent measurement uses science to improve
decisions by providing objective data on people’s
competencies and skills throughout the employee life
cycle. Talent managers have to know what data is
critical to gather and use the most efficient methods
to do so.
Even if leaders have great processes, the quality and success of
talent decisions is impacted by the quality of information used to
make those decisions. Garbage in, garbage out. If managers rely
on good data to decide who to hire, promote or where to invest in
development, they are more likely to make decisions that lead to
better performance, longer retention and ROI for the organization.
Talent Measurement uses science to gauge employee and candidate
competencies by providing genuine insight into employee’s
capabilities and producing objective, consistent and meaningful data
for decision makers. PreVisor Inc.’s “2008 Business Outcomes Study”
shows effective talent measurement programs can drive key business
outcomes across jobs and industries, such as:
• A 31 percent reduction in 90-day churn among inbound call-center
agents.
• A 43 percent higher likelihood of recently hired insurance agents
passing the Series 6 certification exam.
• A 107 percent improvement in sales call-conversion rate.
The Performance and Potential Puzzle
Imagine six department heads are in a conference room. It’s getting
late. There is a large white board covered with numbers, names and
notations as they plot the progress and fates of numerous employees.
The leaders’ shared goal is to identify the best path for their
employees: Who should move roles, who should stay and who would
benefit the most from developmental activities?
They make these decisions based on their overall impressions and
available information about employees’ past and future success in
the organization. On one axis they plot Performance - on the other,
potential. Comments made during the process include:
• “Performance. That’s easy. We measure everyone’s performance
here, so we can use that data.”
• “Oh, wait a minute. We only have objective metrics for our people
in sales.”
• “And our call-center folks. Nothing for our professional roles,
leaders, support staff…”
• “Hmm. I guess we’ll have to use performance review scores for
these other roles. It’s probably the best metric we have.”
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• “It’s the only metric we have for most of these folks.”
• “Uh oh, it looks like everyone scored 4 out of 5 on their
performance review…”
• “Let’s come back to that later. What about Potential?”
• “Hmm. We definitely don’t capture any metrics on that.”
• “I’ve got it…let’s vote!”
Does this process seem effective and fair? What would employees
think if knew critical decisions about their careers were made so
loosely? These leaders are no doubt well-intentioned. They want
to align people with roles that are challenging and rewarding and
in which they can be successful. But they simply don’t have the
information they need to make good decisions.
Talent Measurement
Effective talent measurement encompasses a number of tools and
processes, including:
• Tests: Valid tests can be used to assess knowledge, skills, abilities,
personality traits, vocational interests, values, experience and
judgment. Objective tests are characterized by standardized
administration and scoring, often automated and delivered over
the Internet. Tests are useful in both pre-employment and post-hire
applications.
• Interviews: Science-based interviews are structured and focused
on past performance behaviors. Questions typically are organized
around key competencies, and all candidates are measured on
the same competencies. Good interviews produce scores using
a behaviorally anchored rating scale or some other method to
synchronize the meaning of a particular score for each competency
across interviewers and candidates. Using multiple interviewers per
candidate can also improve the predictability of interview scores.
• Behavior-based performance ratings: To make performance
ratings as objective as possible, focus on work behaviors: ”What
have I seen this person do on the job.” To combat tendencies to
compare employees to each other instead of to the job and other
common biases, raters should be trained how to make effective
behavior-based performance ratings. Performance ratings may come
from a single source, the manager or from multiple sources such as
self-ratings, leaders, coworkers and customers.
• Simulations: Also known as work samples, simulations are highly
predictive of on-the-job performance. Simulations can range from
short, focused experiences designed around a key competency or
skill, to multiday events designed to represent the complexity of
the target role. Recent innovations use computer-based simulations
 The Science Behind Talent Measurement
By Ken Lahti, Ph.D.
to measure targeted skills and performance in complex roles such as
customer service or front line manager.
A foundation in science ensures talent measurement techniques gauge
skills that are important for success in a particular role. That role may
be someone’s current position or a future role. By conducting a careful
analysis of the tasks people are expected to perform in their jobs -
along with the behaviors that differentiate successful and unsuccessful
performance - talent managers can determine the skills portfolio that
drives success.
Effectively measuring the right skills means the competency scores
or ratings used in decision making actually correspond to the person’s
performance in that area. The processes used to collect information
about people should be consistent and unbiased. There should be
evidence - often statistical - that a given tool produces data specifically
related to job performance.
The science part of talent measurement primarily refers to the field of
industrial-organizational psychology the science of people at work.
Scientist-practitioners in this field apply psychometric techniques to
measure human attributes important in work settings.
Researchers have developed and refined various taxonomies of these
attributes – for example, describing the nature, number and relative
importance of work-related personality traits. Industrial-organizational
psychology also has produced job-analysis methods that allow accurate
and objective descriptions of role requirements. These processes
help ensure data relevance and align the measurement processes and
decision systems with business goals and job requirements. The science
is highly developed, and it is relatively straightforward to obtain high-
quality measures of job-related competencies and skills using valid
tools and processes.
Better Talent Management Through Talent
Measurement
In talent management, we are interested in getting the right people
in the right roles and helping them achieve their fullest potential.
But ”talent,” defined as a capacity for success, is not a guarantee of
success- though it sure helps. Talent also is domain-specific. That is,
one may be especially talented in some activities or job roles and less
talented elsewhere. Talent can be a bit elusive, which makes it difficult
to quantify.
Measurement is the process of assigning numbers to attributes or
competencies and skills. Talent managers have to prove the numbers
using tools and evidence to substantiate the numbers they produce and
the claims they make about employee’s potential and performance.
This competency information fuels improved decisions across several
areas.
• Hiring & Promotion: Making the right hiring and placement
decisions can have tremendous impact on individual and
organizational performance. Use of valid pre-employment tests,
combined with structured behavioral interviews focused on important
competencies and success factors, improves quality of hire and
predicts key business metrics. It is also increasingly common to
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West Corp: Measurement
Increases Customer and
Employee Satisfaction
By Ken Lahti, Ph.D.
West Corp. (West) is a leading provider of outsourced
communication solutions to many of the world’s largest
companies, organization and government agencies. Founded
in 1986 and headquarted in Omaha, Neb., the organization has
a team of 41,000 employees based in North America, Europe
and Asia.
The company helps its clients communicate effectively,
maximize the value of their customer relationships and drive
greater profitability from every interaction. West has leveraged
measurement capability to help build a global presence,
lower attrition rates, increase customer satisfaction and put
in place measurement tools to promote ongoing employee
development.
West Business Services, a subsidiary of West Corp., was
experiencing issues impacting productivity and customer
relations in two of its business-to-business sales centers. The
human resources team wanted to gather more data to determine
the root cause and begin to combat the problems.
With most HR problems, there usually is more than one
underlying cause from grumbling in the ranks. According to
the book Best Practices in Organization Development and
Change, the Big 6 employee grumbles include:
• Infrequent, one-way communications.
• Unchallenging work.
• No opportunities to grow and learn.
• No recognition for performance.
• No control over the job situation.
• Lack of feeling that work done makes a difference.
The same issues that cause employees to leave a job also
may contribute to overall employee dissatisfaction and lower
productivity. It fell to a team led by Vanessa Carey, West
Corp.’s director of corporate organizational development, to
find a solution.
After careful review of the existing roadblocks and some
mapping to the business’ desired future state, Carey’s team
recommended a best-practices approach: First, use a 360-
degree feedback tool and a validated personality questionnaire
as a starting point for future research. Then, collect baseline
data on attrition rate, productivity, absentee rate, production
quality and employee relations management issues. Follow-
up baseline data would need to be collected at six, 12 and 18
months. Activities would focus on development of a strong
core management level that could be replicated at all locations.
 The Science Behind Talent Measurement
By Ken Lahti, Ph.D.
incorporate simulations into the candidate evaluation process for many
roles, including leadership positions.
• Training & Development: Understanding what people already do
well and where they need help allows for targeted, impactful training
and development programs. Assessing employee’s skills using
objective tools such as tests, technical interviews and performance
ratings can provide the insight talent managers need to decide
who has certain skills versus who needs additional training. Talent
measurement also can be used diagnostically to plan training and
development investments or as an outcome measure to verify whether
learning has occurred.
• Workforce planning: Reliable, objective information about
competencies and skills of the individuals that comprise teams,
departments or other business units can be useful in workforce
planning decisions. For example, bench strength analyses can be
conducted to examine the performance and potential of internal talent
pools used for succession planning. Further, when normative or
benchmarking data is available, competency and skill levels also can
be compared to performance in other companies to better inform talent
strategy.
Innovation Through Technology
Today’s talent measurement processes combine the best of a century
of behavioral science with modern information and communication
technology to provide data and insight more quickly and easily.
The use of computers and the Internet for administration results in
instantaneous, automated scoring and report generation, make it easier
than ever to administer multiple types of talent measures, such as skills
testing and multisource performance appraisals such as 360s.
The ready availability of computer- and Internet-based tools is driving
the proliferation of talent measurement programs, as well as further
innovation. For example, unproctored Internet testing (UIT) allows
candidates or employees to take assessments from the comfort of their
homes or anywhere they can get online. UIT increases the convenience
for candidates to participate in the recruiting process and enables
organizations to use testing earlier in the hiring process, when it can
deliver more powerful prediction and larger efficiency gains.
Computer-adaptive testing (CAT) also takes advantage of the power
and speed of modern computers to deliver unique assessments tailored
to each individual’s ability level, making for a more accurate, more
efficient and more secure testing process. This potent combination
of science and technology is being used by leading organizations to
supercharge talent management processes.
Talent managers make important decisions about employees
and candidates every day that affect their lives, as well as their
organizations’ success: who to hire, who to promote and what resources
they need to develop and be successful. If managers rely only on
assumptions, impressions, incomplete or inaccurate data, decision
quality suffers. But if talent managers consistently measure people’s
competencies and skills using objective information about employee’s
performance and potential, they have the power to radically improve
talent management.
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West Corp: Measurement
Increases Customer and
Employee Satisfaction (cont.)
By Ken Lahti, Ph.D.
Once management signed off on the recommended solution,
Carey’s team collected the data. Surveys and assessments
were given to 42 managers from two West business services
locations. The competencies measured included coaching and
mentoring, communication, customer focus, judgment and
decision making, problem solving and teamwork skills. Once
the data was analyzed, participants created action plans with
their supervisors.
The data was collected from the two locations and analyzed,
and while results were mixed, the initial findings were
promising. At location one, for sales associate positions
measure over a six-month period, productivity increased
measurably, while employee relations issues decreased. At
location two, for sales associate positions measured over a
three-month period, productivity increased and employee
relations issues decreased.
The personality survey also indentified strengths to be
utilized in the future. The participants felt they were given
an opportunity to voice their opinions freely, take action and
have control over their own development plans. This created
a heightened level of awareness and focus on customer and
employee satisfaction and allowed the Big 6 to be addressed.
Further, there were specific actions that showed positive results
in the first six months, and these will continue to be measured
during the next 12 months.
To get the best results from an initiative of this importance:
• Build a communication strategy on many levels and
frequency.
• Have organizational buy-in and make participation
mandatory.
• Communicate the purpose of the tools to avoid skepticism.
• Review data frequently.
• Implement rewards for sticking to an action plan.
• Be aware that change takes time.
“By involving different levels in the organization, this exercise
helped fuel employee engagement,” Carey said. “We also feel
we can potentially use the personality test results to establish
baseline data on current employees, which can be used for
future hiring. And possibly the most important benefit, we’ve
opened communication lines for change. This will allow our
employees to work together to achieve West’s business goals
more efficiently and rapidly.”