Thursday, July 27, 2006

The Correlation Between the Findings and Performance


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Predictive Validity is a powerful form of validation but It's not possible to correlate the findings - weaknesses, strengths, skills, problems, scores, etc. - to sales performance. I'll tell you why in a moment. We can however, use Predictive Validity to correlate our hiring recommendations to success. That is, 95% of those recommended by our sales specific assessment and subsequently hired are considered successful by their employers. And 75% of those not recommended but hired anyway, fail. Here's why you can't correlate specific findings to sales performance. Consider the following examples with John and Bill: John has two major weaknesses; need for approval, and self limiting record collection, but has strong desire and commitment. He goes to work for a company selling $150K capital equipment, a complex sale, to C-Level executives against brutal competition and a long sell cycle. Bill has the exact same weaknesses but goes to work for a manufacturer selling widgets to purchasing agents for a retail chain - a very transactional sale with little competition in a short sell cycle. Bill will be more successful than John every time, but John will be more successful than the salespeople that were hired without our assessment. It will take 18 months to prove that out. Using another measure, John, while less successful than Bill, makes his first sale for $150K at month 18, while Bill closes 23 accounts totaling $50,000 his third month. So you can't use sales as a measure of performance to correlate the findings either. Here's another try - Bill has a $25,000 quota and surpassed it by 100%. John has no quota until month 18 at which time it's $125K. He surpasses it by 20%. We can use example after example and the only suitable measures are to correlate performance to the hiring recommendation using the manager's measure of success - whether the salesperson is meeting or exceeding expectations, however different they may be from company to company, industry to industry, group to group and position to position.
(c) Copyright 2006 Objective Management Group, Inc.

1 Comments:

At 8/02/2006 06:09:00 PM, Blogger Tony Cole said...

Dave, thanks for the info. It has cleared up some pretty important points when working or attempting to work with large companies that have HR and legal involved in the decision to use pre-hire assessments.

 

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