After two pre-dawn trips to retail Mecca, I became the proud owner of the much-coveted iPhone 4. It’s the first smart phone I’ve ever had, and its innovative design, personalized features, and functionality leave me impressed. Now I’m free from my desk and laptop when I want to check e-mails from work, catch up on online banking, or just goof off on Facebook. It would appear that I’ve finally become one of the “cool” people. Or maybe not.Here’s the problem – I don't have a case for my new phone. Although a few cases are available for the iPhone 4, they are less effective protection than the one I’d prefer, which won’t be available for anywhere from a few weeks to a couple of months. So while I wait, I’ve relegated my slick new phone to the box it came in, a temporary case to protect it from bumps, scratches, and my two kids, either of whom could strike at any moment. It seems ironic that such an investment is limited to the protection offered by a cardboard box. When my preferred case finally does become available, the condition of my iPhone will determine whether I made a good or bad choice. Either way, it’s a gamble.Unfortunately, many organizations throughout the world make similar gambles, only with much greater investments and potential losses. Every organization is after the latest “iPhone 4” available to them, which may include new trends in assessment-based selection, High Potential identification, or other such programs. However, after investing considerable resources into selecting and otherwise identifying these individuals, some organizations don’t make further investments to protect their purchases. So instead of investing in assessment-based development programs to coach new hires, provide insights into derailing behaviors, or groom top talent, these organizations gamble on employees developing themselves. When employees take the initiative to develop critical competencies, the gamble works out. But when the employee fails to reach their full potential – or worse, turns over – the gamble fails.Whether it’s on-the-go access to technology or a better solution for identifying and selecting organizational talent, making significant investments across personal and organizational levels delivers certain advantages. However, if we don’t protect those investments, we risk significant damage or loss.Come to think of it, maybe I should buy that temporary case after all. Blaine GaddisInternational Research ManagerHogan Assessment Systems
A Closer Look At Validity
Benchmarking Personality?
The Value of Values
Personality has been one of the hottest trends in assessment over the last 10-15 years, as organizations and practitioners realize the value and utility a personality can provide in selecting and developing talent. Witness the rise of numerous personality instruments in the marketplace, the use of personality to develop the most highly-prized organizational talent, and the role of personality in the red-hot topic of derailment. While everyone at Hogan certainly would agree whole-heartedly with this movement, we’ve also been banging our drum about the role of values and culture in organizational performance. Despite ample evidence (both scientific and anecdotal), values just don’t seem to get the same degree of attention from organizations and practitioners.
This is a shame, because there is a lot of utility in these types of instruments, and the return on investment for assessing culture is tremendous. In a recent example, one of our financial services clients used the Motives, Values, Preferences Inventory (MVPI) in an effort to reduce turnover in one of their frontline positions. After one year of using the MVPI, they had reduced their turnover by 66%. That’s not a typo – two-thirds reduction in turnover!
I’m not arguing that we should abandon personality and narrow our focus on values. Quite the opposite. Personality and values are very distinct constructs, and each adds incremental prediction and validity over the other. Personality has a lot to do with our abilities to perform certain types of tasks, while values have more to do with our motivation and satisfaction with an organization’s culture. An employee whose values align with the organization’s culture will be more satisfied, and likely to work harder and with a better attitude. If the values and culture don’t align, then even a very capable performer won’t be motivated to do his or her best.
Going back to the study above, we were able to find significant reductions in both voluntary turnover (employees who wanted to leave the organization) and involuntary turnover (employees who were shown the door). Voluntary turnover is naturally where we would expect to find the biggest impact; satisfied employees won’t be searching Monster.com on their lunch break. But the reduction in involuntary turnover means that the organization had employees who were capable of doing the job but just didn’t want to, and were subsequently being terminated for poor performance. By aligning the culture and values for these employees, these underperformers improved as a result of increased motivation.
So how much is this all worth to an organization? In the study above we estimated the cost of turnover at half an employee’s annual salary (a conservative estimate). The annual savings attributed to this program (the difference in the number of employees turning over each year) is well into the millions. Annually. With an ROI of greater than $30 for every $1 spent, this program has paid for itself over and over and over again.
Jarrett Shalhoop
Senior Consultant
Hogan Assessment Systems
Norms: The Behind-the-Scenes Player with Big Impact
How Personality Drives Safety Behavior
Extreme Hogan
Some thoughts on the concept of engagement
Who Wants to be a Psychologist?
Intelligence and Good Judgment
It is hard to overstate the importance of the concept of intelligence for applied psychology; intelligence testing may be the most important single contribution psychology has made to larger society. Advocates of intelligence testing provide data showing that IQ predicts virtually every significant life outcome from income and occupational status to life expectancy. Nonetheless, the concept continues to make some of us uncomfortable for three reasons. First, the concept of intelligence is still poorly defined; the default definition is, “intelligence is what intelligence tests test”. Second, all of us know people who have received very high scores on standard IQ measures who nonetheless have trouble functioning in the world. And third, in standardized cognitive assessment, problems are fully defined; in the real world, problems are almost always poorly defined.
The term “intelligent” is a judgment that we use to evaluate performance; for example, in athletics, certain people are known as smart players and others are not. A moment’s reflection suggests that the term “intelligent” mostly applies to decisions—smart decisions precede smart actions and vice versa. Decision making is particularly important in business, politics, and warfare where money and lives are on the line and bad decisions affect the welfare of many people. Decision making is also typically difficult in business, politics, and warfare because there is almost never enough time or information to make a carefully reasoned decision. The term “good judgment” applies to the ability to make sound and defensible decisions with limited time and information.
The book, “Why Smart Executives Fail” by Sydney Finkelstein (2003), contains a large number of richly detailed case studies of failed business enterprises and is a superb data base for thinking about good (and bad) judgment. At the surface level, businesses fail for a variety of reasons—technology shifts, new competitors, ill-advised acquisitions—but at a deeper level, bad judgment appears to be the cause of the problem in every case. And in every case, the bad judgment was exercised in two stages. In the first stage, the company’s CEO chose the wrong means to accomplish a desired end. In the second stage, the CEO stayed with his/her choice despite information that the choice was a bad one.
For example, in the 1980s, General Motors (GM), the world’s largest automobile manufacturer, faced two looming problems. The first was competition from low cost, high quality Japanese cars. The second was labor unrest at home. The CEO of GM, Roger Smith, decided he could solve both problems by replacing his workers with robots. He invested more than $45 billion in robots—enough to buy both Toyota and Nissan—but the investment failed because the key to the Japanese success was the manner in which they integrated their technology with their workforce, rather than their robotic technology per se. As one industry insider noted, by using technology without the prepared workforce, all Roger Smith did was automate confusion. However, he persisted in his decision, and GM’s productivity continued to decline relative to Toyota.
Again, bad judgment is a two stage process. In the first stage, a person chooses the wrong means to get to the desired end. In the second stage, a person persists with the choice despite evidence that it was wrong. For persons familiar with the structure of the Hogan Business Reasoning Inventory (HBRI), choosing the wrong means to get to a desired end is a failure in Strategic Reasoning, while persisting in a bad choice after data are available is a failure of Tactical Reasoning.